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Exhibit 10.15
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is executed and effective as of the 28th
day of August, 1998, by and between XXXXXXX XX 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 and has been the General Manager of the Company's
wholly-owned subsidiary CY Investment, Inc. ("CY") d/b/a/ IMPRES Technologies
("IMPRES").
The Company desires to continue the employment of Employee as the Vice President
and General Manager of IMPRES, 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 Section 2 for a period commencing on the date of
closing of the sale of the stock of CY to the Company (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 three (3) 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.
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2. DUTIES
2.1. IMPRES VICE PRESIDENT AND GENERAL MANAGER: Performing executive work
of major importance to the Company, with the primary focus being the
profitable management and profitable growth of the sales of IMPRES as
well as the Company as a whole. During the Employment Period, Employee
shall devote his full business time and attention to performing his
duties as Vice President and General Manager of IMPRES. He shall 1)
continue to build and supervise sales teams to profitably sell IMPRES
products and services to customers in territories associated with all
of the IMPRES branches in the United States and worldwide, including
the headquarters branch; 2) manage the overall direction,
coordination, and evaluation of IMPRES to achieve or exceed both the
earnings-per-share and gross revenue targets of IMPRES; 3) assist the
Vice President of Sales and Marketing in formulating and administering
IMPRES policies; 4) obtain profitable sales at IMPRES; 5) review and
analyze the activities, costs, operations of IMPRES to define and to
track its progress toward achieving their goals and objectives; 6)
carry out supervisory responsibilities in accordance with Company
policies, and applicable laws; 7) interview, hire and train sales
managers and staff for IMPRES; 8) plan, assign and direct the work of
managers and staff for IMPRES, appraise their performance, and reward
and discipline them, and address their complaints; 9) open new IMPRES
offices; 10) submit all required documentation in a timely and
accurate manner. The above description of duties is non-exhaustive.
Employee acknowledges that the Company's IMPRES subsidiary may be
fully merged into the Company's operations and no longer exist as a
separate subsidiary. In the event this happens, Employee may be given
a different positions within the Company. Any such position shall be
comparable to that held by Employee at the Company's IMPRES
subsidiary. Employee shall work out of the IMPRES headquarters
location and shall report to the Company's Chief Executive Officer or,
in his absence, to the
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Company's Vice President of Worldwide Sales and Marketing. The above
description of duties is non-exhaustive. 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 or 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, notwithstanding the
foregoing, Employee any exercise any "good reason" rights he may have
under Section 4.6.2(iv).
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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 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.
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 or may be either applicable or
related to present or future business of the Company, its research and
development, or the business of its customers. For example, trade
secret information includes, but is not limited to devices, secret
inventions, processes and compilations of information, records,
specifications and information concerning customers or vendors.
Employees shall not disclose any of the above-mentioned trade secrets,
directly or indirectly, and for twelve (12) months immediately
following the termination of employment with the Company, except as
required in the course of employment with the Company.
2.5. Employee agrees that, for a period of twelve (12) months immediately
following the termination of employment with the Company, Employee
shall neither directly nor indirectly solicit business as to products
or services competitive with those of the Company, from any of the
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Company's customers with whom the Employee had contact within twelve
(12) months prior to the Employee's termination.
2.6. Employee further agrees that for a period of twelve (12) months after
termination of employment, Employee will not directly or indirectly
induce or solicit any of Company's employees to leave their
employment.
3. COMPENSATION. As compensation for his 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 $110,000.00 per year,
subject to an annual increase (if any) in the sole discretion of the
Board, 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.
3.2 BONUSES.
3.2.1. Employee shall receive a $10,000 signing bonus on the Start
Date, subject to such withholding as is required by law.
3.2.2. During the time that Employee is Vice President and General
Manager of the Company's IMPRES subsidiary and subject to such
withholding as required by law, Employee shall receive an
annual bonus of $50,000.00 and based on the Employee meeting at
least 90% of the following goals:
July 1, 1998 - June 30, 1998 Achieve $72 million in
gross revenue for IMPRES
Each July 1 - June 30 thereafter Achieve at least a ten
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percent (10%) increase in
gross revenue over the
previous July 1 - June 30
period
3.2.3. During the time that Employee is Vice President and General
Manager of the Company's IMPRESS subsidiary and subject to such
withholding as is required by law, should Employee achieve one
hundred twenty-five percent (125%) or more of Employee's yearly
goal as defined in Section 3.2.2 above, Employee shall receive
an additional bonus equal to one-tenth of one percent (0.1%) of
any revenue amounts that exceed the Employee's revenue goal for
the 12 month period. (Thus, for example, if the Employee's 12
month revenue goal is $72 million and actual revenues for the
period are $82 million, in addition to receiving the $50,000
bonus defined in Section 3.2.2 above, Employee will also
receive a additional bonus for the period of $10,000 ($10
million X .01%).
3.2.4. Employee is aware that the Company may merge its IMPRES
subsidiary into the Company's other operations and at such time
the Company may renegotiate this bonus with Employee. A
increase in this bonus at that time shall not constitute a
termination of the Employee hereunder.
3.3. BENEFITS. Employee's benefits shall be as determined by the Company's
employee handbook, as may be modified from time to time by the
Company, unless otherwise stated in this Agreement. In the case of a
conflict between the terms of this agreement and the Company's
employee handbook, the terms of this Agreement shall govern.
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3.3.1. VACATION. Employee shall be entitled to vacation time as been
accrued each pay period since his date of first hire, less any
vacation taken in such amounts and under such conditions as
normally afforded to the Company's executives. In the event
Employee does not use such vacation, he 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 him.
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 original documentation in support of all
business expenses reimbursement sought.
3.3.3. STOCK OPTIONS. Company shall grant Employee incentive stock
options for 33,359 shares on the Start Date, with the exercise
price being the market price at close of trading on the date
that the options are granted, and subject to the other terms of
the Company's stock option agreement, a copy of which is
attached hereto as Exhibit A. These options shall vest
immediately upon being granted and shall be granted in lieu of
services rendered to the Company. The issuance of any future
options is subject to approval by the Company Board of
Directors Compensation Committee. Grants of stock and stock
options by the Company may be subject to taxes which are the
sole responsibility of the Employee.
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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 senior
executive employees. The amount of automobile allowance
provided by the Company to Employees shall be $500.00 per
month.
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 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
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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.
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 eighteen (18) month's total
base salary at the
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rates set forth herein, and such other benefits as may be
required by law.
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 eighteen (18) 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, 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 executive employees on the
level comparable to Employee, for a period of one year from the date
of the termination of the Employment Period.
4.6 CERTAIN DEFINITIONS. For purposes of this Agreement:
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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 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
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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
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;
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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 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
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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: If to the Company:
Xxxxxxx Xx Wareforce Incorporated
(omitted) 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000 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 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. In the event any party hereto commences arbitration
or legal action in connection with this Agreement, the prevailing
party shall be entitled to its attorneys' fees, costs and expenses
reasonably incurred in such action, and the amount thereof shall be
included in any judgment or award granted under Section 5.1.
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.
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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"
WAREFORCE INCORPORATED
a California corporation
/s/Xxxxxxx Xx By: /s/Xxx Xxxxxxxx
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Xxxxxxx Xx Title: General Counsel
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