(PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)
EXHIBIT 10.50
EMPLOYMENT AGREEMENT
AGREEMENT, dated April 8, 2002, between CONSUMER PROGRAMS
INCORPORATED, a Missouri corporation (the "Corporation"), and
XXXX X. XXXXXXXX (the "Executive").
WHEREAS, the Corporation desires to employ the Executive
in the capacity of Executive Vice President, Finance/Chief
Financial Officer and the Executive will be one of the key
executives of the Corporation;
WHEREAS, there is much competition for the type of business
performed by the Corporation in the locales in which the
Corporation operates, and the Corporation and Executive
acknowledge that the Corporation is active in the product
markets in which it competes;
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WHEREAS, Executive, during his employment, will be entrusted
with confidential information; and
WHEREAS, Executive and the Corporation recognize and
acknowledge that, to ensure the continued growth and stability
of the Corporation, it is necessary to obtain an agreement from
Executive not to compete with the Corporation and not to
disclose confidential information of the Corporation.
NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the
parties hereto hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Affiliated Companies" shall mean any corporation
(or other business
1
entity) controlling, controlled by or under common control with
the Corporation.
(b) "Beneficiary" shall mean the person designated in
writing by the Executive as his beneficiary under this Agreement,
or in the absence of such designation, his estate.
(c) "Cause" shall mean:
(1) prior to a Change of Control, (i) conduct or
activity of the Executive materially detrimental to the
Corporation's reputation or business (including financial)
operations; (ii) gross or habitual neglect or breach of duty or
misconduct of the Executive in discharging the duties of his
position; or (iii) prolonged absence by the Executive from his
duties (other than on account of illness or disability) without
the consent of the Corporation.
(2) after a Change of Control, (i) an act or acts
of dishonesty on the Executive's part which are intended to
result in his substantial personal enrichment at the expense of
the Corporation; (ii) any material violation by the Executive of
his obligations and covenants pursuant to this Agreement which
is demonstrably willful and deliberate on the Executive's
part and which results in material injury to the Corporation;
or (iii) the conviction of Executive of a felony or of a crime
involving moral turpitude.
(d) A "Change of Control" shall mean a change in
control of a nature that would be required to be reported in
response to Item 1(a) of the Current Report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended ("Exchange
Act") or would have been required to be so reported but for the
fact that such event had been "previously reported" as that term
is defined in Rule 12b-2 of Regulation 12B of the Exchange Act
unless the transactions that give rise to the change in control
are approved or ratified by a majority of the members of the
Incumbent Board of CPI
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Corp. who are not employees of the Corporation; provided that,
without limitation, notwithstanding anything herein to the
contrary, such a change in control shall be deemed to have
occurred if (a) any Person is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of CPI Corp. representing 40% or
more of the combined voting power of CPI Corp.'s then
outstanding securities ordinarily (apart from rights accruing
under special circumstances) having the right to vote at
elections of directors ("Voting Securities"), (b) individuals
who constitute the Board of CPI Corp. on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election, or
nomination for election by CPI Corp.'s shareholders, was
approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of CPI Corp. in which such
person is named as a nominee for director, without objection
to such nomination) shall be, for purposes of this clause (b),
considered as though such person were a member of the Incumbent
Board, or (c) approval by the stockholders of CPI Corp. of a
reorganization, merger or consolidation, in each case, with
respect to which persons who were the stockholders of
CPI Corp. immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own, directly or
indirectly, more than 50% of the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding
voting securities, or a liquidation or dissolution of CPI Corp.
or of the sale of all or substantially all of the assets of CPI
Corp. For purposes of this Agreement, the term "Person" shall
mean and include any individual, corporation, partnership,
group, association or other "person," as such term is used in
Section
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14(d) of the Exchange Act, other than CPI Corp., the Corporation
or an Affiliated Company or any employee benefit plan(s)
sponsored or maintained by the Corporation or any Affiliated
Company.
(e) "Code" shall mean the Internal Revenue Code of
1986, as may be amended from time to time.
(f) "Continuing Directors" shall have the meaning set
forth in Paragraph 3(G) of Article Ten of CPI Corp.'s
Certificate of Incorporation.
(g) "Fiscal Year" shall mean the Fiscal Year of the
Corporation.
(h) "Permanent Disability" shall mean the inability of
Executive to perform the services contemplated by Section 4
hereof for a period of at least one hundred eighty (180)
consecutive calendar days or for thirty-five (35) weeks (whether
or not consecutive) in any twelve (12) month period on account
of any sickness, injury or other infirmity or disability.
(i) "Retirement" shall mean the Executive's voluntary
or involuntary termination of employment with the Corporation
except for termination on account of (A) Cause as defined in
Subsection 6(b) hereof, (B) death or (C) Permanent Disability
before attaining age sixty-five (65).
(j) "Term of Employment" shall have the meaning set
forth in Section 3 hereof.
2. EMPLOYMENT. The Corporation hereby employs and engages
the services of the Executive as one of its key executives
initially in the position of Executive Vice President,
Finance/Chief Financial Officer, for the Term of Employment set
forth in Section 3. The Executive agrees to serve the
Corporation for the Term of Employment as provided herein.
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3. TERM OF EMPLOYMENT. The Executive's Term of Employment
shall be a period commencing on the date hereof and ending one
(1) year thereafter; provided, however, that upon the expiration
of the aforesaid period (the "Expiration Date") and upon each
anniversary of the Expiration Date, the Term of Employment shall
automatically be extended for an additional one (1) year period
unless Executive or the Corporation notifies the other in
writing at least sixty (60) days prior to the commencement of
such one (1) year period of an intention to terminate this
Agreement. Notwithstanding anything herein to the contrary, the
Term of Employment shall terminate upon Executive's death or
Permanent Disability as set forth in subsection 6(a) hereof or
upon the Corporation's termination of Executive's employment for
Cause pursuant to subsection 6(b) hereof. The Term of
Employment shall also terminate upon the Executive's attainment
of age 65, unless the Board of Directors requests that the
Executive extend his service to the Corporation after age 65.
No such extension shall exceed one year, provided that the
Term may thereafter be renewed from year to year by request of
the Board of Directors.
4. POSITION AND DUTIES.
(a) Prior to a Change of Control, during the Term of
Employment, the Executive shall serve the Corporation in such
capacity as the Corporation may determine. After a Change of
Control, during the Term of Employment, the Executive's
position, authority and responsibilities, the type of work he
is asked to perform, and the status and stature of the people
with whom he is asked to work, shall be comparable to that
existing with respect to the Executive as of the date
immediately prior to the Change of Control, and after a Change
of Control the Executive's services shall be performed at
the location where the Executive was employed as of the date
immediately prior to the Change of Control, or at such other
location as
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may be mutually agreed between the Corporation and the Executive.
(b) The Executive agrees to devote his full business
time during normal business hours to the business and affairs of
the Corporation (except as otherwise provided herein), to use
his best efforts to promote the interests of the Corporation and
its Affiliated Companies and to perform faithfully and
efficiently the responsibilities assigned to him in accordance
with the terms of this Agreement to the extent necessary to
discharge such responsibilities, except for (i) service on
corporate, civic or charitable boards or committees not
significantly interfering with the performance of such
responsibilities and (ii) periods of vacation and sick leave
to which he is entitled. It is expressly understood and agreed
that the Executive's continuing service on any boards and
committees with which he shall be connected, as a member or
otherwise, as of the date hereof, or any such service
approved by the Corporation during the Term of Employment,
shall not be deemed to interfere with the performance of the
Executive's services to the Corporation pursuant to this
subparagraph 4(b).
5. COMPENSATION AND OTHER CONDITIONS OF EMPLOYMENT.
(a) Base Salary. During the Term of Employment, the
Executive shall receive an annual base salary (the "Base
Salary"), in equal installments payable bi-weekly or at such
other intervals as salary is normally paid by the Corporation
to its employees, at an annual rate established by the
Corporation and any Affiliated Companies as of the date
hereof. Executive's Base Salary for Fiscal Year 2002 is set
forth on Exhibit A, attached hereto and incorporated herein.
The Base Salary shall be reviewed at least once each year and
may be increased adjusted at any time and from time to time by
action of the Board of Directors of CPI Corp., any committee
thereof or any individual having authority to take such action,
in accordance with the
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Corporation's regular practices. Any increase in the Base
Salary shall not serve to limit or reduce any other obligation
of the Corporation hereunder, and after such increase the Base
Salary shall not be reduced from such increased level.
(b) Bonus. After a Change of Control, in addition
to the Base Salary, the Executive shall be awarded for each
Fiscal Year during the Term of Employment an annual bonus (the
"Annual Bonus") (pursuant to any bonus plan or program of the
Corporation, any incentive plan or program of the Corporation,
or otherwise) in cash at least equal to the highest bonus paid
or payable to the Executive in respect of any of the Fiscal
Years during the three Fiscal Years immediately prior to the
date of the Change of Control. Prior to a Change of Control,
the amount of the Executive's Annual Bonus shall be determined
in accordance with the Corporation's regular practice.
Executive's Annual Bonus Plan for the Corporation's Fiscal Year
2002 is set forth on Exhibit B, attached hereto and incorporated
herein.
(c) Other Compensation Plans. After a Change of
Control, in addition to the Base Salary and Annual Bonus payable
as hereinabove provided, during the Term of Employment, the
Executive shall be entitled to participate in all other
compensation plans and programs, including, without limitation,
savings plans, stock option plans, and retirement plans of the
Corporation and its Affiliated Companies (collectively, the
"Savings Plans"), on a basis at least equivalent to that
provided by the Corporation and its Affiliated Companies to the
Executive under such programs immediately prior to the date of
the Change of Control. Prior to a Change of Control, the
Executive's entitlement to participate in the Savings Plans
shall be determined in accordance with the Corporation's
regular practice. Prior to a Change of Control, nothing herein
shall be construed to prevent the Corporation from amending or
altering any such
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plans in accordance with the terms thereof.
(d) Benefit Plans. After a Change of Control, during
the Term of Employment, the Executive, his spouse, or his
dependents, as the case may be, shall be entitled to receive
all amounts which he, his spouse or his dependents are or would
have been entitled to receive as benefits under all other benefit
plans of the Corporation and its Affiliated Companies, including,
without limitation, medical, dental, disability, group life,
accidental death and travel accident insurance plans and
programs (collectively, the "Benefit Plans") on a basis at
least as favorable to the Executive as on the date immediately
prior to the date of the Change of Control. Prior to a Change
of Control, the Executive's and such other persons' entitlement
to participate in the Benefit Plans shall be determined in
accordance with the Corporation's regular practice.
(e) Expenses. During the Term of Employment, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the regular policies and procedures of the Corporation.
(f) Office and Support Staff. After a Change of
Control the Executive shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to
secretarial and other assistance, at least equal to those
provided to the Executive as of the date immediately prior to
the date of the Change of Control.
(g) Other Benefits. Executive shall also be entitled
to the benefits described in Exhibit C, attached hereto and
incorporated herein.
6. TERMINATION OF EMPLOYMENT.
(a) Death or Permanent Disability; Age 65. Except for
the
obligations of the Corporation
set forth in this Subsection 6(a), this Agreement shall
terminate automatically upon
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the Executive's death, Permanent Disability or attainment of age
65 (unless the Board of Directors has requested that the
Executive continue his service thereafter). In the event of
such termination, the Corporation shall pay to the Executive's
Beneficiary or, in the event of Permanent Disability or
attainment of age 65, the Executive or his legal representative,
all benefits and Base Salary accrued through the date of
termination, including, without limitation, amounts payable
under Subsections 5(c), and (d) and (g).
(b) Cause. The Corporation may terminate the
Executive's employment for Cause. If the Executive's employment
is terminated for Cause, the Corporation shall pay the Executive
his full accrued Base Salary through the effective date of the
termination of his employment (which shall
be no earlier than the date of receipt of notice thereof)
at the rate in effect at the time of such termination, and the
Corporation shall have no further obligations to the Executive
under this Agreement.
(c) Notification Prior to One Year Extension. Either
Executive or the Corporation may terminate this Agreement by
notifying the other party in writing of an intention to do so at
least sixty (60) days prior to the commencement of the one-year
extension period described in Section 3 hereof.
(d) Payments for Involuntary Termination Without
Cause.
(1) If prior to a Change of Control, (i) the
Corporation terminates Executive's employment (other than for
Cause pursuant to subsection 6(b) hereof) or (ii) the Executive's
employment terminates by reason of the Corporation's termination
of this Agreement pursuant to subsection 6(c) hereof, the
Corporation shall pay Executive following such involuntary
termination his full accrued Base Salary through the date of
termination of
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employment plus an amount equal to (i) one hundred percent
(100%) of Executive's Base Salary, payable in twenty-six (26)
equal bi-weekly installments or at such other intervals as
salary is normally paid by the Corporation to its employees.
The payment pursuant to this Subsection 6(c)(1) shall be in full
discharge of any claims, actions, demands or damages of every
nature and description which Executive might have or might
assert against the Corporation or any Affiliated Company in
connection with or arising from the termination of Executive's
employment or the termination of this Agreement.
(2) If following a Change of Control, the
Corporation terminates Executive's employment (other than for
Cause pursuant to Subsection 6(b) hereof), the Corporation
shall, at the time of such involuntary termination, make a lump
sum cash payment to Executive equal to 200% of his Base
Salary for the Fiscal Year of termination. In addition to
the payment pursuant to this Subsection 6(d)(2) and any payments
to which Executive may be entitled pursuant to Subsection 5(g),
Executive shall be entitled to all remedies available under this
Agreement or at law in respect of any damages suffered
by Executive as a result of an involuntary termination of
employment without Cause.
7. GROSS-UP FOR PARACHUTE TAX.
(a) General. In the event that following a Change of
Control Executive becomes entitled to any payments (whether
pursuant to this Employment Agreement or any other plan,
arrangement or agreement) from the Corporation in the nature of
compensation ("Parachute Payments") that in the opinion of a
certified public accounting firm (selected in the manner set
forth in Subsection 7(b)) or that under the provisions of a
notice of assessment from the Internal Revenue Service causes
imposition of the tax under Section 4999 of the Code or any
similar tax
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that may hereafter be imposed (the "Excise Tax"), the Corporation
shall pay Executive, at the time specified in Subsection 7(d), the
Gross-Up Payment (as determined in accordance with Subsection
7(c)).
(b) Selection of C.P.A. Within fifteen (15) days
after any termination of Executive's employment following a
Change of Control, the majority of the Continuing Directors
as of the date immediately prior to the Change of Control shall
select a certified public accounting firm (the "C.P.A.") to
determine the amount, if any, of the Excise Tax and the amount,
if any, of the Gross-Up Payments.
(c) Amount of Gross-Up Payments.
(1) The Gross-Up Payments shall be in an amount
such that the net amount retained by Executive with respect to
the Parachute Payments and Gross-Up Payments, after deduction
of any Excise Tax to which the Parachute Payments may be subject
and any federal, state, and local income taxes and Excise Tax
upon the Gross-Up Payments, shall be equal to the gross amount
of the Parachute Payments.
(2) For purposes of determining the amount of
the Gross-Up Payments, Executive shall be deemed to pay federal
income taxes at the applicable rate of federal income taxation
for the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the applicable rate
of taxation for the calendar year in which the Gross-Up
Payment is to be made.
(3) In the event that the Excise Tax is
subsequently determined to exceed the amount taken into account
at the time the Gross-Up Payment is made pursuant to Subsection
7(d)(1) hereof (including any excess attributable to any
Parachute Payments the
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existence or amount of which could not be accurately determined
at the time of the Gross-Up Payment), the Corporation shall make
an additional Gross-Up Payment in respect of such excess (plus
any interest and addition to tax payable with respect to such
excess) within fifteen (15) days after the amount of such excess
is determined by the C.P.A. or by the Internal Revenue Service
(the "IRS") in a notice of assessment.
(d) Timing of Gross-Up Payments. Gross-Up Payments
other than Gross-Up Payments pursuant to Subsection 7(c)(3)
shall be paid not later than forty-five (45)days following
payment of any Parachute Payments to which the Gross-Up Payments
are attributable; provided, however, that if the amount of such
Gross-Up Payment or portion thereof cannot be finally determined
on or before such day, the Corporation shall pay to Executive on
such day an estimate, as determined in good faith by the
Corporation, of the minimum amount of such payments and shall
pay the remainder of such payments (together with interest at
the applicable federal rate provided in Section l274(d) of the
Code) as soon as the amount thereof can be determined by the
C.P.A., but in no event later than forty-five (45) days after
payment of such Parachute Payments.
(e) Corporation's Right to Designate Tax
Representative; Assignment of Refund Proceeds. If the
IRS proposes an assessment of the Excise Tax against
Executive or proposes an additional assessment of Excise Tax in
excess of the amount previously reported by Executive:
(1) Executive shall within five (5) days after
receipt from the IRS of notice of the proposed Excise Tax
assessment notify the Corporation in writing and furnish the
Corporation with copies of all correspondence from the IRS
relating to the proposed Excise Tax
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assessment.
(2) The Corporation shall be authorized to
designate an attorney and/or accountant (the "Tax
Representative") to serve as Executive's exclusive
representative with respect to all proceedings with the IRS
relating to the proposed Excise Tax assessment, including but
not limited to negotiating a settlement or compromise of the
proposed Excise Tax assessment, filing a claim for refund with
respect thereto, and seeking judicial review of any
disallowance of a claim for refund. Executive hereby agrees
to execute an appropriate power of attorney authorizing the
Tax Representative to represent Executive with respect to the
Excise Taxes. Executive further agrees to take any other
appropriate actions reasonably requested by the Tax
Representative in connection therewith; provided, however, that
the Corporation shall reimburse Executive for any expenses
incurred by Executive as a result of compliance with such
requests.
(3) If the Tax Representative files a claim for
refund of Excise Taxes with respect to which the Corporation
has made a Gross-Up Payment and such refund claim is allowed
by the IRS or by the final judgment of a court of competent
jurisdiction, Executive shall endorse the refund check payable
to the Corporation and shall send the refund check to the
Corporation not later than five (5) days after receipt from the
IRS.
(4) If the Corporation designates a Tax
Representative, the Corporation shall pay all of his
professional fees and expenses and hold Executive harmless
from any claims in connection therewith. The Tax Representative
shall keep Executive timely informed of all significant
developments in the Excise Tax matter and shall send to Executive
copies of all correspondence relating thereto.
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(5) Notwithstanding anything herein to the
contrary, if the Corporation is in material breach of any of its
obligations pursuant to this Agreement, the Corporation's rights
pursuant to this Subsection 7(e) shall be extinguished and
Executive shall have the right to revoke any power of attorney
executed pursuant to this Subsection 7(e).
8. NO OBLIGATION TO MITIGATE DAMAGES. The Executive
shall not be obligated to mitigate any damages by seeking other
employment or otherwise, and no amount payable hereunder and no
benefit or service credit for benefits shall be reduced in
the event that the Executive shall accept alternative employment.
9. BENEFITS PAYABLE ONLY FROM CORPORATE ASSETS.
(a) No Trust. Nothing contained in this Agreement,
and no action taken pursuant to its provisions by either party
hereto shall create, or be construed to create, a trust of any
kind, or a fiduciary relationship between the Corporation and
the Executive or his Beneficiary.
(b) Executive's Status as Unsecured General Creditor.
The payment of any benefits hereunder to the Executive or his
Beneficiary shall be made from assets which shall continue, for
all purposes, to be a part of the general assets of the
Corporation; no person shall have or acquire any interest in
such assets by virtue of the provisions of this Agreement.
To the extent that the Executive or his Beneficiary acquires a
right to receive payments from the Corporation under the
provisions hereof, such right shall be no greater than the right
of any unsecured general creditor of the Corporation.
(c) Recovery of Cost of Providing Benefits. In the
event that, in its discretion, the Corporation purchases an
insurance policy insuring the life of the Executive to enable
the
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Corporation to recover, in whole or in part, the cost of
providing any benefits hereunder, neither the Executive nor his
Beneficiary under this Agreement shall have or acquire any
rights whatsoever therein. The Corporation shall be the sole
owner and beneficiary of any such policy and, as such, shall
possess and may exercise all incidents of ownership therein.
10. Determination of Benefits and Claims Procedure. The
Corporation shall make all determinations as to rights to
benefits under this Agreement. Subject to and in compliance
with the specific procedures contained in the applicable
regulations promulgated under the Employee Retirement Income
Security Act of 1974, as amended: (i) any decision by the
Corporation denying a claim for benefits under this Agreement
by the Executive or his Beneficiary shall be stated in writing
by the Corporation and delivered or mailed to the claimant;
(ii) each such notice shall set forth the specific reasons for
the denial, written to the best of the Corporation's ability
in a manner that may be understood without legal or actuarial
counsel; and (iii) the Corporation shall afford a reasonable
opportunity to the claimant whose claim
for benefits has been denied for a review of the decision
denying such claim.
11. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan
or program provided by the Corporation or any Affiliated
Companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the
Executive may have under any other agreements with the
Corporation or any Affiliated Companies. Amounts which
are vested benefits or which the Executive is otherwise entitled
to receive under any plan or program of the Corporation or any
Affiliated Companies shall be payable in accordance with the
terms of such plan or program.
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12. FULL SETTLEMENT. After a Change of Control, the
Corporation's obligation to make the payments provided for
herein and otherwise to perform its obligations hereunder shall
not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or
other right which the Corporation may have against the Executive
or others. Unless it is finally determined by a court of
competent jurisdiction after all available appeals that the
Corporation has validly terminated the Executive's employment
for Cause, the Corporation agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Corporation or others
of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof, plus, in each case, interest compounded quarterly, on
the total unpaid amount determined to be payable hereunder,
such interest to be calculated on the basis of the prime
commercial lending rate announced by US Bank, N.A. in
effect from time to time, for the period commencing on the date
of such contest and ending on the date on which the Corporation
shall pay such amount.
13. COVENANTS.
(a) Non-Competition.
(1) Executive recognizes that during the course
of Executive's employment with the Corporation, Executive will
be instructed about and become acquainted with confidential
information of the Corporation, including, without limitation,
customer lists, methods of sales, the existence and contents
and terms of this Agreement, methods of sales procurement, sales
procurement techniques, sales procedures and equipment/supply
information, equipment and supply acquisition procedures and
processes and sources, customer evaluation
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procedures, customer maintenance and supply maintenance
procedures and corresponding information relating to persons,
firms and corporations which are or may become customers of
the Corporation and, further, companies from which the
Corporation obtains various products and supplies for sale,
resale and distribution to customers of the Corporation. T
his confidential information further includes, but is
not limited to, customer identity, supplier identity and
terms, purchase terms, sales techniques, purchase
conditions and rates, customer needs, billing procedures
and processes, contacts and customer information. Further,
Executive agrees and acknowledges that the development and
assemblage and maintenance of the customer base of the
Corporation has taken extraordinary time, money, resources,
training, and effort by the Corporation and its employees.
(2) Executive agrees that he will not during
the Term of Employment and for a period of two (2) years
following cessation of his employment by the Corporation
("Restricted Period"), for any cause or reason, directly or
indirectly:
(A) engage in any business in competition
with the Corporation and its Affiliates or supply and sell to
present customers, former customers and prospects of the
Corporation and its Affiliates; or
(B) own, manage, operate, control, advise,
be employed by, consult, or materially participate in, or be
materially involved in any manner with the ownership,
management, operation or control of, individually or through any
other entity or device, any business that competes with the
business then conducted by the Corporation or any Affiliate;
provided, however, that mere ownership as an investor
of not more than five percent (5%) of the securities of a
corporation or other business enterprise shall
not in and of itself be deemed to
17
violate this Section 13(a)(2)(B).
(b) Nondisclosure of Confidential Information.
(1) Executive will not, except as authorized by
the Corporation in writing, during or at any time after the
termination of Executive's employment with the Corporation,
directly or indirectly, use for himself or others, or disclose,
communicate, divulge, furnish to, or convey to any other person,
firm, or corporation, any secret or confidential information,
knowledge or data of the Corporation or that of third
parties obtained by Executive during the period of his
employment with the Corporation. Such information, knowledge
or data includes, without limitation, the following:
(A) Secret or confidential matters of a
technical nature such as, but not limited to, methods,
know-how, formulations, compositions, processes, discoveries,
machines, inventions, computer programs, and similar items or
research projects involving such items,
(B) Secret or confidential matters of a
business nature such as, but not limited to, marketing policies
or strategies, information about costs, price lists, purchasing
and purchasing policies, profits, market, sales or lists of
customers, customer history information, and
(C) Secret or confidential matters
pertaining to future developments such as, but not limited to,
research and development or future marketing or merchandising.
(2) Executive, upon termination of his employment
with the Corporation, or at any other time upon the Corporation's
request, shall deliver promptly to the
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Corporation all manuals, letters, notes, notebooks, reports,
formulations, computer programs and similar items, memoranda,
lists of customers, customer history information and all other
materials and copies thereof relating in any way to the
Corporation's business and in any way obtained by Executive
during the term of employment with the Corporation which are
in his possession or under his control; and Executive will not
make or retain any copies of any of the foregoing and will so
represent to the Corporation upon termination of his
employment.
(c) Inducement.
(1) Executive agrees that during the Term of
Employment and during the Restricted Period, Executive shall
not use any confidential information for the purposes of
inducing or attempting to induce any present, former, or
prospective customer of the Corporation or its Affiliates to
become a customer of Executive or any person, firm, or
corporation, or business association with which Executive is
affiliated in any capacity with respect to the markets supplied
by the Corporation or its Affiliates.
(2) Executive agrees that during the Term of
Employment and during the Restricted Period, Executive shall
not directly or indirectly solicit for employment or employ
any of the Corporation's employees to work for Executive or any
business association with which/whom Executive is affiliated,
or to work for any other company in the markets supplied by
the Corporation or its Affiliates.
(d) Interest of Parties. Executive agrees that the
duration of the limitations set forth in this Section 13 are
reasonable under the circumstances, considering Executive's
position with the Corporation and other relevant factors, and
that this will not constitute a serious handicap to Executive
in securing future employment.
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(e) Disclosure to Corporation. Executive shall
promptly communicate and disclose to the Corporation all
information, observations and data obtained by Executive in
the course of Executive's employment. All written materials,
records and documents made by Executive or coming into
Executive's possession during the Term of Employment concerning
any inventions, products, processes or equipment, manufactured,
used, developed, investigated or considered by the Corporation
or any Affiliated Companies shall be the property of the
Corporation, and upon termination of the Term of Employment,
or upon request of the Corporation during the Term of
Employment, Executive shall promptly deliver the same to the
Corporation. Executive agrees to render to the Corporation
such reports
of the activities of the business undertaken by Executive or
conducted under Executive's direction during
the Term of Employment as the Corporation may reasonably
request.
(f) Inventions.
(1) Executive shall promptly communicate and
disclose in writing to the Corporation all those inventions
and developments whether patentable or not, as well as patents
and patent applications (hereinafter collectively called
"Inventions"), made, conceived, developed or purchased
by Executive, or under which Executive acquires the right
to grant licenses or to become licensed, alone or jointly with
others, during the Term of Employment, which have arisen or may
arise out of Executive's employment, or relate to any matters
pertaining to, applicable to, or useful in connection
with, the business or affairs of the Corporation or any
Affiliated Companies. All of Executive's right, title and
interest in, to and under all such inventions, licenses and
rights to grant licenses shall be the sole property of the
Corporation. Any such inventions disclosed to anyone by
Executive within one (1) year after the termination
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of the Term of Employment for any cause whatsoever shall be
deemed to have been made or conceived by Executive during the
Term of Employment.
(2) As to all such inventions, Executive shall,
upon request of the Corporation, during the Term of Employment
or thereafter:
(A) Execute all documents which the
Corporation shall deem necessary or proper to enable it to
establish title to such inventions, or other rights, and to
enable it to file and prosecute applications for letters patent
of the United States and any foreign country; and
(B) Do all things (including the giving of
evidence in suits and other proceedings) which the Corporation
shall deem necessary or proper to obtain, maintain or to assert
patents for any and all such inventions or to assert its rights
in any inventions not patented.
All expenses incident to any action required by the
Corporation or taken on its behalf pursuant to the provisions of
this paragraph shall be borne by the Corporation including
without limitation a reasonable payment for Executive's time and
expenses involved in case he or she is not then in its employ.
(g) Litigation. Executive agrees that during the
Term of Employment or thereafter, Executive shall do all things,
including the giving of evidence in suits and other proceedings,
which the Corporation shall deem necessary or proper to obtain,
maintain or assert rights accruing to the Corporation during the
Term of Employment and in connection with which Executive has
knowledge, information or expertise. All reasonable expenses
incurred by Executive during the Term of Employment or thereafter
in fulfilling the duties set forth in this
21
Section, shall be reimbursed by the Corporation to the full
extent legally appropriate including, without limitation, a
reasonable payment for Executive's time in the event this
Agreement has terminated prior to the time Executive renders
such assistance, advice and counsel.
14. EQUITY. The parties hereto agree that the services to
be rendered by Executive are special, unique and of an
extraordinary character. In the event of the breach by Executive
of any of the provisions of this Agreement, the Corporation, in
addition and as a supplement to such other rights and remedies
as may exist in its favor, may apply to any court of law or
equity having jurisdiction to enforce the specific performance
of this Agreement, and/or may apply for injunctive relief
against any act which would violate any of the provisions of
this Agreement.
15. NO ASSIGNMENT.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Corporation shall not
be assignable by the Executive other than by will or the laws
of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives and Beneficiary.
(b) This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors. The
Corporation shall require any successor to all or substantially
all of the business and/or assets of the Corporation, whether
direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form
and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner
and to the same extent as the Corporation would be required
to perform if no such succession had taken place.
16. SEVERABILITY. The invalidity or unenforceability of
any provision of this
22
Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, and this Agreement shall be
construed in all respects as if such invalid or unenforceable
provision or clause were omitted.
17. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of Missouri, without
reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or
modified other than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
(b) In the event that litigation is required to
enforce any provision of this Agreement, subject to the
provisions of Section 12 hereof, the prevailing party shall
be entitled to reasonable attorneys fees.
(c) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxx X. Xxxxxxxx
00000 Xxxxxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
If to the Corporation:
Consumer Programs Incorporated
0000 Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Chief Executive Officer
23
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by
the addressee.
(d) This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter hereof.
(e) The Corporation may withhold from any amounts
payable under this Agreement such federal, state or local taxes
as shall be required to be withheld pursuant to any applicable law
or regulation.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement in duplicate, all as of the day and year first above
written.
CONSUMER PROGRAMS INCORPORATED
By: /s/ J. Xxxxx Xxxxxxx
-------------------------------
J. Xxxxx Xxxxxxx,
Chairman of the Board/
Chief Executive Officer
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxx
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