Exhibit 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 26th day of April, 1997, is by
and between Professional Computer Solutions, Inc., a New York corporation (the
"Company") and a wholly-owned subsidiary of U.S. Office Products Company
("USOP"), a Delaware corporation, and Xxxxxxxx Xxxxxxxxx ("Employee").
RECITALS
The Company desires to continue to employ Employee and to have the benefit
of his skills and services, and Employee desires to continue employment with the
Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. Employment; Term. The Company hereby employs Employee to perform the
duties described herein, and Employee hereby accepts employment with the
Company, for a term beginning on the date hereof and continuing for a period of
three years (the "Term").
2. Position and Duties. The Company hereby employs Employee as President
of the Company. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of the president of the Company.
In addition, Employee shall have principal responsibility for the software
development group of USOP's Computer Network Services division. Employee will
report directly to the Board of Directors of the Company (the "Board"). Employee
hereby accepts this employment upon the terms and conditions herein contained
and agrees to devote all of his professional time, attention, and efforts to
promote and further the business of the Company. Employee shall faithfully
adhere to, execute, and fulfill all policies established by the Company.
3. Compensation. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) Base Salary. Effective on the date hereof, the base salary payable to
Employee shall be $250,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures, but not less than monthly. On at
least an annual basis, the Board will review Employee's performance and may make
increases to such base salary if, in its sole discretion, any such increase is
warranted.
(b) Perquisites, Benefits, and Other Compensation. During the Term,
Employee shall be entitled to receive all perquisites and benefits as are
customarily provided by the Company to its employees of similar seniority,
subject to such changes, additions, or deletions as the Company may make
generally from time to time, as well as such other perquisites or benefits as
may be specified from time to time by the Board.
4. Expense Reimbursement. The Company shall reimburse Employee for (or, at
the Company's option, pay) all business travel and other out-of-pocket expenses
reasonably incurred by Employee in the performance of his services hereunder
during the Term. All reimbursable expenses shall be appropriately documented in
reasonable detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense reporting
policy, as well as applicable federal and state tax record keeping requirements.
5. Place of Performance. Employee understands that he may be requested by
the Company to relocate from his present residence to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement or as part of a promotion or a change in duties and
responsibilities. In such event, if Employee agrees to relocate, the Company
will provide Employee with a relocation allowance, in an amount determined by
the Company, to assist Employee in covering the costs of moving himself, his
immediate family, and their personal property and effects. The total amount and
type of costs to be covered shall be determined by the Company, in light of
prevailing Company policy at the time.
6. Termination; Rights on Termination. Employee's employment may be
terminated in any one of the followings ways, prior to the expiration of the
Term:
(a) Death. The death of Employee shall immediately terminate the Term, and
no severance compensation shall be owed to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been unable to perform the material
duties of his position on a full-time basis for a period of four consecutive
months, or for a total of four months in any six-month period, then 30 days
after written notice to Employee (which notice may be given before or after the
end of the aforementioned periods, but which shall not be effective earlier than
the last day of the applicable period), the Company may terminate Employee's
employment hereunder if Employee is unable to resume his full-time duties at the
conclusion of such notice period. Subject to Section 6(g) below, if Employee's
employment is terminated as a result of Employee's disability, the Company shall
continue to pay Employee his base salary at the then-current rate for the lesser
of (i) three months from the effective date of termination, or (ii) whatever
time period is remaining under the then-current period of the Term (without
regard to renewals thereof). Such payments shall be made in accordance with the
Company's regular payroll cycle.
(c) Termination by the Company "For Cause." The Company may terminate the
Term 10 days after written notice to Employee "for cause," which shall be: (i)
Employee's material breach of this Agreement, which breach is not cured within
10 days of receipt by Employee of written notice from the Company specifying the
breach; (ii) Employee's gross negligence in the performance of his duties
hereunder, intentional nonperformance or mis-performance of such duties, or
refusal to abide by or comply with the directives of the Board, or the Company's
policies and procedures, which actions continue for a period of at least 10 days
after receipt by Employee of written notice of the need to cure or cease; (iii)
Employee's willful dishonesty, fraud, or misconduct with respect to the business
or affairs of the Company or USOP, and that in the judgment of the Company or
USOP materially and adversely affects the operations or reputation of the
Company or USOP; (iv) Employee's conviction of a felony or other crime involving
moral turpitude; or (v) Employee's abuse of alcohol or drugs (legal or illegal)
that, in the Company's judgment, materially impairs Employee's ability to
perform his duties hereunder. In
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the event of a termination "for cause," as enumerated above, Employee shall have
no right to any severance compensation.
(d) Termination by Employee "For Cause." At any time after the
commencement of employment, Employee may terminate the Term 10 days after
written notice "for cause," which shall be: (i) the Company's material breach of
this Agreement, which breach is not cured within 10 days of receipt by the
Company (and the general counsel of USOP) of written notice from Employee
specifying the breach; (ii) the removal of Employee from, or the failure to
reappoint Employee to, the Board; (iii) the relocation of the principal place of
business or principal office of the Company more than 50 miles from its current
location, without the consent of Employee; (iv) a material reduction in
Employee's title; or (v) a material reduction in Employee's responsibilities
which reduction is commercially unreasonable. Should Employee terminate his
employment "for cause," subject to Section 6(g) below, Employee shall receive
from the Company the base salary at the rate then in effect for the longer of
(i) three months from the date of termination, or (ii) whatever time period is
remaining under the then-current period of the Term. Such payments shall be made
in accordance with the Company's regular payroll cycle.
(e) Without Cause. At any time after the commencement of employment, the
Company may, without cause, terminate the Term and Employee's employment,
effective 30 days after written notice is provided to Employee. Should Employee
be terminated by the Company without cause, subject to Section 6(g) below,
Employee shall receive from the Company the base salary at the rate then in
effect for the longer of (i) three months from the date of termination, or (ii)
whatever time period is remaining under the then-current period of the Term.
Such payments shall be made in accordance with the Company's regular payroll
cycle. If Employee resigns or otherwise terminates his employment for any reason
other than those specified in Section 6(d) above, or for no reason, Employee
shall receive no severance compensation.
(f) Payment Through Termination. Upon termination of Employee's employment
for any reason provided above, Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements (including payments for
accrued vacation and sick leave, in each case in accordance with applicable
policies of the Company) due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to Employee only to the extent and in the manner expressly provided
above in this Section 6. All other rights and obligations of USOP, the Company,
and Employee under this Agreement shall cease as of the effective date of
termination, except that Employee's obligations under Sections 7, 8, 9 and 10
below shall survive such termination in accordance with their terms.
(g) Right to Offset. In the event of any termination of Employee's
employment under this Agreement, Employee shall have no obligation to seek other
employment; provided, that in the event that Employee secures employment or any
consulting or other similar arrangement during the period that any payment is
continuing pursuant to the provisions of this Section 6, the Company shall have
the right to reduce the amounts to be paid hereunder by $0.50 for each $1.00 of
Employee's earnings from such other employment.
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7. Restriction on Competition.
(a) During the Term, and thereafter, if Employee continues to be employed
by the Company and/or any other entity owned by or affiliated with the Company
or USOP on an "at will" basis, for the duration of such period, and thereafter
for a period equal to the longer of (x) one year, or (y) the period during which
Employee is receiving any severance pay from the Company, Employee shall not,
directly or indirectly, for himself or on behalf of or in conjunction with any
other person, company, partnership, corporation, business, group, or other
entity (each, a "Person"):
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant, advisor, or sales representative, in any business
selling any products or services in direct competition with the Company or
USOP's Computer Network Services division, within 100 miles of any location
where the Company or USOP conducts business (the "Territory");
(ii) call upon any Person who is, at that time, within the
Territory, an employee of the Company or USOP for the purpose or with the intent
of enticing such employee away from or out of the employ of the Company or USOP;
(iii) call upon any Person who or that is, at that time, or has
been, within one year prior to that time, a customer of the Company or USOP
within the Territory for the purpose of soliciting or selling products or
services in direct competition with the Company or USOP within the Territory; or
(iv) on Employee's own behalf or on behalf of any competitor, call
upon any Person who or that, during Employee's employment by the Company or USOP
was either called upon by the Company or USOP as a prospective acquisition
candidate or was the subject of an acquisition analysis conducted by the Company
or USOP.
(b) The foregoing covenants shall not be deemed to prohibit Employee from
acquiring as a passive investment not more than three percent (3%) of the
capital stock of a competing business, whose stock is traded on a national
securities exchange or through the automated quotation system of a registered
securities association.
(c) It is further agreed that, in the event that Employee shall cease to
be employed by the Company or USOP and enters into a business or pursues other
activities that, at such time, are not in competition with the Company or USOP's
Computer Network Services division, Employee shall not be chargeable with a
violation of this Section 7 if the Company or USOP subsequently enters the same
(or a similar) competitive business or activity or commences competitive
operations within 100 miles of Employee's new business or activities. In
addition, if Employee has no actual knowledge that his actions violate the terms
of this Section 7, Employee shall not be deemed to have breached the restrictive
covenants contained herein if, promptly after being notified by the Company or
USOP of such breach, Employee ceases the prohibited actions.
(d) For purposes of this Section 7, references to "USOP" shall mean U.S.
Office Products Company, together with its subsidiaries and affiliates.
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(e) The covenants in this Section 7 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. If any provision of this Section 7 relating to the time period
or geographic area of the restrictive covenants shall be declared by a court of
competent jurisdiction to exceed the maximum time period or geographic area, as
applicable, that such court deems reasonable and enforceable, said time period
or geographic area shall be deemed to be, and thereafter shall become, the
maximum time period or largest geographic area that such court deems reasonable
and enforceable and this Agreement shall automatically be considered to have
been amended and revised to reflect such determination.
(f) All of the covenants in this Section 7 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company or
USOP, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by USOP or the Company of such covenants; provided,
that upon the failure of the Company to make any payments required under this
Agreement, Employee may, upon 30 days' prior written notice to the Company,
waive his right to receive any additional compensation pursuant to this
Agreement and engage in any activity prohibited by the covenants of this Section
7. It is specifically agreed that the period of two years stated at the
beginning of this Section 7, during which the agreements and covenants of
Employee made in this Section 7 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this Section 7.
(g) If the time period specified by this Section 7 shall be reduced by law
or court decision, then, notwithstanding the provisions of Section 6 above,
Employee shall be entitled to receive from the Company his base salary at the
rate then in effect solely for the longer of (i) the time period during which
the provisions of this Section 7 shall be enforceable under the provisions of
such applicable law, or (ii) the time period during which Employee is not
engaging in any competitive activity, but in no event longer than the applicable
period provided in Section 6 above. If Employee is subject to a restriction on
competitive activity as a party to that certain Agreement and Plan of
Reorganization, dated as of April 26, 1997, by and among USOP, PCSI Acquisition
Corp., the Company and the stockholder of the Company (the "Merger Agreement"),
then Employee shall abide by, and in all cases be subject to, the restrictive
covenants (whether in this Section 7 or in the Merger Agreement) that, in the
aggregate, impose restrictions on Employee for the longest duration and the
broadest geographic scope (taking into account the effect of any applicable
court decisions limiting the scope or duration of such restrictions), it being
agreed that all such restrictive covenants are supported by separate and
distinct consideration. This Section 7(g) shall be construed and interpreted in
light of the duration of the applicable restrictive covenants.
(h) Employee has carefully read and considered the provisions of this
Section 7 and, having done so, agrees that the restrictive covenants in this
Section 7 impose a fair and reasonable restraint on Employee and are reasonably
required to protect the interests of the Company and USOP, and their respective
officers, directors, employees, and stockholders. It is further agreed that the
Company and Employee intend that such covenants be construed and enforced in
accordance with the changing activities, business, and locations of the Company
and USOP throughout the term of these covenants.
8. Confidential Information. Employee hereby agrees to hold in strict
confidence and not to disclose to any third party any of the valuable,
confidential, and proprietary business, financial, technical, economic, sales,
and/or other types of proprietary business information relating to the
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Company and/or USOP (including all trade secrets), in whatever form, whether
oral, written, or electronic (collectively, the "Confidential Information"), to
which Employee has, or is given (or has had or been given), access as a result
of his employment by the Company. It is agreed that the Confidential Information
is confidential and proprietary to the Company and/or USOP because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales, or other valuable aspects of the
Company's and USOP's business and trade, including, without limitation,
technologies, products, processes, plans, clients, personnel, operations, and
business activities. This restriction shall not apply to any Confidential
Information that (a) becomes known generally to the public through no fault of
Employee; (b) is required by applicable law, legal process, or any order or
mandate of a court or other governmental authority to be disclosed; or (c) is
reasonably believed by Employee, based upon the advice of legal counsel, to be
required to be disclosed in defense of a lawsuit or other legal or
administrative action brought against Employee; provided, that in the case of
clauses (b) or (c), Employee shall give the Company reasonable advance written
notice of the Confidential Information intended to be disclosed and the reasons
and circumstances surrounding such disclosure, in order to permit the Company to
seek a protective order or other appropriate request for confidential treatment
of the applicable Confidential Information.
9. Inventions. Employee shall disclose promptly to the Company and USOP
any and all significant conceptions and ideas for inventions, improvements, and
valuable discoveries, whether patentable or not, that are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one year thereafter, and that are directly related to the business or
activities of the Company, USOP's Computer Network Services division or any
other division, subsidiary or business of USOP in which Employee is materially
involved during the Term, and that Employee conceives as a result of his
employment by the Company, regardless of whether or not such ideas, inventions,
or improvements qualify as "works for hire." Employee hereby assigns and agrees
to assign all his interests therein to the Company or its nominee. Whenever
requested to do so by the Company, Employee shall execute any and all
applications, assignments, or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
10. Return of Company Property. Promptly upon termination of Employee's
employment by the Company for any reason or no reason, Employee or Employee's
personal representative shall return to the Company (a) all Confidential
Information; (b) all other records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, correspondence, reports, records, charts,
advertising materials, and other data or property delivered to or compiled by
Employee by or on behalf of the Company, USOP or their respective
representatives, vendors, or customers that pertain to the business of the
Company or USOP, whether in paper, electronic, or other form; and (c) all keys,
credit cards, vehicles, and other property of the Company or USOP. Employee
shall not retain or cause to be retained any copies of the foregoing. Employee
hereby agrees that all of the foregoing shall be and remain the property of the
Company or USOP, as the case may be, and be subject at all times to their
discretion and control.
11. No Prior Agreements. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee, his employment by the
Company, and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other Person.
Further, Employee agrees to indemnify and hold harmless the Company and its
officers, directors, and representatives for any claim, including, but not
limited to, reasonable attorneys'
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fees and expenses of investigation, of any such third party that such third
party may now have or may hereafter come to have against the Company or such
other persons, based upon or arising out of any non-competition agreement,
invention, secrecy, or other agreement between Employee and such third party
that was in existence as of the date of this Agreement. To the extent that
Employee had any oral or written employment agreement or understanding with the
Company, this Agreement shall automatically supersede such agreement or
understanding, and upon execution of this Agreement by Employee and the Company,
such prior agreement or understanding automatically shall be deemed to have been
terminated and shall be null and void.
12. Assignment; Binding Effect. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience, and skills. Employee agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement. This
Agreement may not be assigned or transferred by the Company without the prior
written consent of Employee. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Notwithstanding the foregoing, if Employee accepts
employment with a subsidiary or affiliate of USOP other than the Company, unless
Employee and his new employer agree otherwise in writing, this Agreement shall
automatically be deemed to have been assigned to such new employer (which shall
thereafter be an additional or substitute beneficiary of the covenants contained
herein, as appropriate), with the consent of Employee, such assignment shall be
considered a condition of employment by such new employer, and references to the
"Company" in this Agreement shall be deemed to refer to such new employer. If
the Company is merged with or into another subsidiary or affiliate of USOP, such
action shall not be considered to cause an assignment of this Agreement, and the
surviving or successor entity shall become the beneficiary of this Agreement and
all references to the "Company" shall be deemed to refer to such surviving or
successor entity. It is intended that USOP will be a third-party beneficiary of
the rights of the Company under this Agreement. No other Person shall be a
third-party beneficiary.
13. Complete Agreement; Waiver; Amendment. This Agreement is not a promise
of future employment. Employee has no oral representations, understandings, or
agreements with the Company or any of its officers, directors, or
representatives covering the same subject matter as this Agreement. This
Agreement together with the Merger Agreement, is the final, complete, and
exclusive statement and expression of the agreement between the Company and
Employee with respect to the subject matter hereof and thereof, and cannot be
varied, contradicted, or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by a writing signed by the party waiving the benefit of such term.
14. Notice. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: Professional Computer Solutions, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Secretary
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with a copy to: U.S. Office Products Company
0000 Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Director, Esq.
To Employee: Xxxxxxxx Xxxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Notice shall be deemed given and effective three days after the deposit in the
U.S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or, if sent by express delivery, hand delivery, or
facsimile, when actually received. Either party may change the address for
notice by notifying the other party of such change in accordance with this
Section 14.
15. Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 7(e) above. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
16. Equitable Remedy. Because of the difficulty of measuring economic
losses to the Company and/or USOP as a result of a breach of the restrictive
covenants set forth in Sections 7, 8, 9 and 10, and because of the immediate and
irreparable damage that would be caused to the Company and/or USOP for which
monetary damages would not be a sufficient remedy, it is hereby agreed that in
addition to all other remedies that may be available to the Company or USOP at
law or in equity, the Company and USOP shall be entitled to specific performance
and any injunctive or other equitable relief as a remedy for any breach or
threatened breach of the aforementioned restrictive covenants.
17. Arbitration. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to, detract
from, or modify any provision hereof nor to award punitive damages to any
injured party. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by the Company. Each party shall bear its own counsel fees. The
arbitration proceeding shall be held in the city where the Company is located.
Notwithstanding the foregoing, the Company and/or USOP shall be entitled to seek
injunctive or other equitable relief, as contemplated by Section 16 above, from
any court of competent jurisdiction, without the need to resort to arbitration.
18. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of New Jersey, without regard to its conflict
of laws principles.
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be
duly executed as of the date first written above.
PROFESSIONAL COMPUTER
SOLUTIONS, INC.
By: /s/ Xxxxxxxx Xxxxxxxxx
----------------------------------
Name:
Title:
EMPLOYEE:
/s/ Xxxxxxxx Xxxxxxxxx
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Xxxxxxxx Xxxxxxxxx
