Exhibit 10.27
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this ____ day of July, 1998,
by MLC Holdings, Inc. a Delaware corporation with its principal place of
business at 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx (hereinafter
referred to as "MLC" and collectively with all of MLC's subsidiaries and
divisions, the "Employer"), and Xxxxx Xxxx residing at 0000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxx, XX 00000 (the "Executive").
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of the
___ day of July, 1998 (the "Merger Agreement"), by and among MLC, MLC Network
Solutions of Virginia, Inc., a wholly owned subsidiary of MLC ("Network
Solutions"), PC Plus, Inc. ("PCPlus") and the stockholders of PCPlus, PCPlus
merged (the "Merger") with and into Network Solutions and Network Solutions was
the surviving corporation in the Merger;
WHEREAS, the delivery and execution of this Agreement by the Executive was
a material condition to the consummation of the Merger; and
WHEREAS, the parties wish to set forth the terms and conditions upon
which the Employer will employ the Executive.
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1) Term of Employment; Title; Duties; Authority. The Employer hereby employs the
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Executive, and the Executive hereby accepts employment with the Employer, for a
period of two (2) years from the date hereof (the "Initial Term") and upon the
other terms set forth in this Agreement. The term of this Agreement shall renew
automatically for successive one (1) year periods (each, a "Renewal Term")
unless a party hereto provides written notice to terminate to the other party
prior to thirty (30) days before the end of the Initial Term or any Renewal
Term. The Executive shall serve as the President and Chief Executive Officer of
Network Solutions, which may be a subsidiary or a division of MLC, during the
term of his employment under this Agreement. The Executive shall report to the
person designated by the Chief Executive Officer of MLC and the Executive shall
perform such services consistent with his position as may be reasonably assigned
to him from time to time by such person.
2) Extent of Services. The Employee agrees to devote his entire business time
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(which shall exclude any permissible vacation time described in Section 7 below)
and attention to the performance of his duties under this Agreement. He shall
perform his duties to the best of his ability and shall use his best efforts to
further the interests of the Employer. To the extent necessary to reasonably
perform his duties hereunder, the Executive shall work at the principal office
of PCPlus located at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000. The
Executive represents and warrants to the
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Employer that he is able to enter into this Agreement and that his ability to
enter into this Agreement and to fully perform his duties hereunder are not
limited to or restricted by any agreements or understandings between the
Executive and any other person. For the purposes of this Agreement, the term
"person" means any natural person, corporation, partnership, limited liability
partnership, limited liability company, or any other entity of any nature.
Notwithstanding the foregoing, the Executive shall be permitted to serve as
chairman of, to provide general oversight services to, and otherwise to
participate in a non-executive capacity in the operations of ImagingCo (as
defined in the Merger Agreement) during non-business hours so as such
participation does not affect or interfere in any material manner, in the
reasonable discretion of Employer, the Executive's performance of his duties
pursuant to this Agreement. The Executive shall be given reasonable
accommodation, including the use of his vacation time or unpaid leave (each as
described in Section 7 below), to permit him to provide the foregoing services
to ImagingCo consistent with his duties hereunder.
3) Base Salary. The Employer shall pay the Executive a base annual salary of
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$150,000, subject to such increases as may be approved by the Chief Executive
Officer or the Board of Directors of MLC. The salary shall be payable in monthly
installments of $12,500, minus such deductions as may be required by law or
reasonably requested by the Executive.
4) Bonus. The Executive shall be eligible to receive annual discretionary
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bonuses determined by the Chief Executive Officer or the Board of Directors of
MLC based on the Executive's performance. The Executive shall also be eligible
to be granted options as determined by the Board of Directors of MLC from time
to time in addition to the options granted pursuant to Section 6 of this
Agreement.
5) Severance.
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a) If the Executive is terminated by the Employer without cause at any time
during the term hereof, all of the Executive's non-vested stock options
that would have vested as set forth in Section 6 of this Agreement during
the year of this Agreement in which the termination occurred shall
immediately vest and shall be exercisable by the Employee in accordance
with their terms. If the Executive voluntarily terminates his employment
with Employer or is terminated for cause, no such stock options shall vest.
b) For the purposes of this Agreement, "cause" shall mean any of the
following: (i) gross or willful misconduct in the performance of the
Executive's duties hereunder; (ii) conviction of a crime (other than
traffic violations) involving dishonesty, fraud or moral turpitude; (iii)
physical or mental incapacity for a period of five (5) consecutive months
(such period of incapacity shall be deemed to be continuously consecutive
unless Executive has returned to work on a full-time basis for eight (8)
consecutive weeks); (iv) the occurrence of any wrongful and intentional act
or omission which has a material adverse impact on the financial condition
or financial prospects of Employer; or (v) the failure of the Executive,
for any reason, to devote all of his business time and efforts in a
diligent manner to the performance of his duties and responsibilities
hereunder.
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6) Stock Options.
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a) Pursuant to MLC's 1996 Stock Incentive Plan (the "Stock Incentive
Plan"), the Executive shall be granted stock options for the purchase of 10,000
shares of common stock of MLC with an exercise price equal to the fair market
value of the common stock on the date on which the Compensation Committee of the
Board of Directors of MLC grants the option (the "Date of Grant"). Subject to
partial early vesting as set forth in Section 5(a) of this Agreement and
provided that the Executive continues to be employed by the Employer, twenty
percent (20%) of such stock options shall vest on each anniversary date of this
Agreement; provided, however, in the event that the Executive voluntarily
terminates this Agreement or the Employer terminates the Executive for cause,
all vested options shall terminate ninety (90) days following the date of
termination. The stock option agreement for such options may contain such other
and further terms as are not inconsistent with this Agreement or the 1996 Stock
Incentive Plan.
b) Subject to Section 5(a), all unvested options shall expire on the date
in which the Executive is no longer employed by the Employer.
7) Fringe Benefits. The Executive shall be entitled to all benefits generally
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available to employees of the Employer of similar levels of authority,
including, without limitation, eight weeks of paid vacation. In addition, the
Executive shall be entitled to the use, at Employer's expense, any car currently
leased by PCPlus until expiration of the lease term and of the use of a company
credit card for business purposes.
8) Reimbursement of Business Expenses. The Employer shall reimburse the
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Executive in accordance with Employer's policies for all reasonable
out-of-pocket costs incurred or paid by the Executive in connection with, or
related to, the performance of his duties, responsibilities or services under
this Agreement, upon presentation by the Executive of documentation, expense
statements, vouchers, and/or such other supporting information as the Employer
may reasonably request.
9) Non-Competition and Non-Solicitation.
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a) The Executive agrees that while the Executive is employed pursuant to
this Agreement and for a period of the greater of (i) four years from and after
the Closing Date (as defined in the Merger Agreement) or (ii) two years from and
after the date he ceases employment with the Employer for any reason (the
"Non-Competition Period"), whether by action of the Executive or the Employer,
the Executive will not, except as otherwise provided herein, engage or
participate, directly or indirectly, as principal, agent, executive, director,
proprietor, joint venturer, trustee, employee, employer, consultant,
stockholder, partner or in any other capacity whatsoever, in the conduct or
management of, or own any stock or any other equity investment in or debt of,
any VAR business that the Employer or its affiliates conduct as of the Closing
Date including, without limitation, equipment leasing and equipment financing;
provided, however, that the restrictions set forth in this Section 9(a) shall be
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inapplicable (i) with respect to any lines of business of the Employer or its
affiliates in which the Executive has not actively participated in the operation
or management in the event that (a) the Employer terminates the Executive for
any reason other than for cause, (b) the Executive terminates his employment
with Employer for cause or (ii) in the event of MLC's bankruptcy, dissolution or
forced reorganization.
b) During the Non-Competition Period, the Executive will not, for his/her
own benefit or for the benefit of any person or entity other than the Employer,
(i) solicit, or assist any person or entity other than the Employer to solicit,
any officer, director, executive or employee of the Employer to leave his/her
employment, (ii) hire or cause to be hired any present or former officer,
director, executive or employee of the Employer, or (iii) engage any present or
former officer, director, executive or employee of the Employer as a partner,
contractor, sub-contractor, employee or consultant.
c) During the Noncompetition Period, the Executive will not (i) solicit, or
assist any person or entity other than the Employer to solicit, any person or
entity that is a client of the Employer, or has been a client of the Employer
during the preceding twelve (12) months prior to the date of termination, to
lease and/or finance information technology assets or any other products or
services the Employer provides to a client, or (ii) interfere with any of
Employer's business relationships.
d) The Executive acknowledges that (i) the markets served by the Employer
are national in scope and are not dependent on the geographic location within
the United States of the executive personnel or the businesses by which they are
employed; and (ii) the above covenants are manifestly reasonable on their face,
and the parties expressly agree that such restrictions have been designed to be
reasonable and no greater than is required for the protection of the Employer.
e) Nothing in this Agreement shall be deemed to prohibit the Executive from
owning, solely as an investment, securities of any person which are traded on a
national securities exchange or quoted on a inter-dealer quotation system,
provided that such securities constitute two percent (2%) or less of the
outstanding equity securities of any such person and the Executive is not a
controlling person of, or a member of a group which controls, such person.
f) Nothing contained in this Section 9 shall in any way preclude the
involvement of the Executive in the imaging and other non-VAR businesses of
ImagingCo, provided that such non-VAR businesses do not consist of businesses
that involve computer leasing and equipment financing.
10) Confidential Information.
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a) The Executive shall not (for his own benefit or the benefit of any
person or entity other than the Employer) use or disclose any of the Employer's
trade secrets or other confidential information. The term "trade secrets or
other confidential information" includes, by way of example, matters of a
technical nature, "know-how," computer programs (including documentation of such
programs), research projects, and matters of a business nature, such as
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proprietary information about costs, profits, markets, sales, lists of
customers, and other information of a similar nature to the extent not available
to the public and to the extent not independently generated by the Executive or
others without any reference to any of the Employer's trade secrets or other
confidential information, and such materials constituting plans for future
development. After termination of this Agreement, the Executive shall not use or
disclose trade secrets or other confidential information unless such information
becomes a part of the public domain other than through a breach of this
Agreement or is disclosed to the Executive by a third party who is entitled to
receive and disclose such information or such disclosure is required by law.
b) Upon the effective date of notice of the Executive's or the Employer's
election to terminate this Agreement, or at any time upon the request of the
Employer, the Executive (or his heirs or personal representatives) shall deliver
to the Employer all documents and materials containing trade secrets and
confidential information relating to the Employer's business and all documents,
materials and other property belonging to the Employer, which in either case are
in the possession or under the control of the Executive (or his heirs or
personal representatives).
c) All discoveries and works made or conceived by the Executive during and
in the course of his employment by the Employer, jointly or with others, that
relate to the Employer's activities shall be owned by the Employer. The terms
"discoveries and works" include, by way of example, inventions, computer
programs (including documentation of such programs), technical improvements,
processes, drawings, and works of authorship, including sales materials which
relate to direct sales, telemarketing, wall media products, sampling/comparing
or services. The Executive shall promptly notify and make full disclosure to,
and execute and deliver any documents requested by, the Employer to evidence or
better assure title to such discoveries and works by the Employer, assist the
Employer in obtaining or maintaining for itself at its own expense United States
and foreign patents, copyrights, trade secret protection and other protection of
any and all such discoveries and works, and promptly execute, whether during his
employment or thereafter, all applications or other endorsements necessary or
appropriate to maintain patents and other rights for the Employer and to protect
its title thereto. Any discoveries and works which, within six months after the
termination of the Executive's employment by the Employer, are made, disclosed,
reduced to a tangible or written form or description, or are reduced to practice
by the Executive and which pertain to work performed by the Executive while
with, and in his capacity as an employee of, the Employer shall, as between the
Executive and the Employer, be presumed to have been made during the Executive's
employment by the Employer.
11) Enforcement.
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a) The parties to this Agreement mutually agree that, in recognition of
Employer's dependence on Executive's experience to carry out its business plan
and Executive's senior and key position in the Employer, the restrictions
detailed in Sections 9 and 10 of this Agreement are necessary and appropriate to
give effect to the intended relationships of the parties. Executive agrees that
because damages arising from violations of Sections 9 and 10 of this Agreement
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are extremely difficult to quantify with certainty, injunctive relief will be
necessary to effect the intent of such Sections. Accordingly, Executive hereby
consents to the imposition of otherwise appropriate equitable relief as a remedy
to his breach of Sections 9 and 10 of this Agreement.
b) It is the desire and intent of the parties hereto that the restrictions
set forth in Sections 9 and 10 of this Agreement shall be enforced and adhered
to in every particular, and in the event that any provision, clause or phrase
shall be declared by a court of competent jurisdiction to be judicially
unenforceable either in whole or in part -- whether the fault be in duration,
geographic coverage or scope of activities precluded -- the parties agree that
they will mutually petition the court to sever or limit the unenforceable
provision so as to retain and effectuate to the greatest extent legally
permissible the intent of the parties as expressed in Sections 9 and 10 of this
Agreement; provided, however, that any costs and expenses incurred by the
Executive as a result of such petition shall be reimbursed by the Employer to
the Executive.
12) Miscellaneous.
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a) All notices required or permitted under this Agreement shall be in writing
and shall be deemed effective upon personal delivery or upon deposit with
the United States Postal Service, by registered or certified mail, postage
prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the
other in writing from time to time.
b) Whenever the context may require, any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the
singular forms of nouns and pronouns shall include the plural, and vice
versa.
c) This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or
oral, relating to the subject matter of this Agreement.
d) This Agreement may be amended or modified only by a written instrument
executed by both the Employer and the Executive.
e) This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the Commonwealth of Virginia, without regard to its
conflicts of laws principles.
f) This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns; provided, however,
that the obligations of the Executive are personal and shall not be
assigned or delegated by him.
g) No delays or omission by the Employer or the Executive in exercising any
right under this Agreement shall operate as a waiver of that or any other
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right. A waiver or consent given by the Employer or the Executive on any
one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
h) The captions appearing in this Agreement are for convenience of reference
only and in no way define, limit or affect the scope or substance of any
section of this Agreement
i) In case any provision of this Agreement shall be held by a court with
jurisdiction over the parties to this Agreement to be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
EXECUTIVE
EMPLOYER
MLC HOLDINGS, INC.
By: _/s/ Xxxxxxx X. Norton_________________ /s/ Xxxxx Achi________
Xxxxxxx X. Xxxxxx Xxxxx Xxxx
Chairman, President and
Chief Executive Officer
