EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is made as of the 9th day of June,
1998, by and between Programmer's Paradise, Inc., a Delaware corporation having
its principal place of business at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx (the "Company") and Xxxx Xxxxxxxxx, a resident of Brielle, New Jersey
("Executive").
WHEREAS, the Company desires to continue to employ Executive and Executive
desires to continue to be employed by the Company, and the Board of Directors of
the Company (the "Board of Directors") has determined that it is in the best
interests of the Company and its shareholders to formalize the employment
relationship pursuant to this Agreement; and
WHEREAS, the Board of Directors has further determined that it is in the
best interests of the Company and its shareholders to assure that the Company
will have the continued dedication and focus of Executive throughout any changes
the Company may make, and to make certain provisions therefor to assure
continued stability to both the Company and Executive.
NOW, THEREFORE, in consideration of the mutual premises contained herein,
the Company and the Executive mutually agree as follows:
1. Employment. The Company agrees to continue Executive's employment and
Executive agrees to serve the Company faithfully, diligently and to the best of
his ability as Senior Vice President and Chief Financial OFFICER, pursuant to
the primary responsibilities and goals set forth in the position description
attached to this Agreement as Exhibit A. Executive agrees to assume other roles
and responsibilities as mutually agreed to from time to time in writing by the
Company and Executive. Executive agrees to devote his full business time,
energy, attention and skill to such employment and agrees not to, directly or
indirectly, engage or participate in, or become employed by, or become a
director, officer, or partner of, or provide services for compensation to or in
connection with, any business activity other than that of the Company, except as
may be specifically permitted in writing by the President of the Company.
2. Employment At-Will. Executive's employment with the Company (the
"Employment Period") is at-will; the Company may terminate Executive's
employment at any time and for any reason, with other terms and provisions of
termination to be in accordance with this Agreement.
3. Salary. During the Employment Period, the Company will pay Executive a base
salary of $12,917 per month, payable twice a month in accordance with the
regular payroll practices of the Company, and subject to any increases as may be
determined by the Board of Directors.
4. Bonus Plan. During the Employment Period, Executive will be a participant
in the Company management bonus program which will be funded and paid at the
discretion of the Board of Directors upon the Company and management employees
meeting such goals, including net income goals, as are set forth by the
Compensation Committee of the Board of Directors, and Executive will also be
entitled to receive such other bonuses in such amounts and on such terms as may
be determined by the Board of Directors.
5. Stock Options. Executive has been previously granted stock options for
shares of common stock of the Company, all of which shall continue according to
their terms. Nothing in this Agreement shall be construed to affect such stock
option grants in any way, and nothing in this Agreement shall be construed to
impose any obligation upon the Company with respect to Company stock or options
therefor.
6. Benefit Plans. During the Employment Period, Executive will be entitled to
participate in the Company's benefit plans and programs applicable generally to
other employees or executives similarly situated with the Company, including
medical and health care plans, life insurance, disability and a 401(k) plan,
consistent with the terms of such plans and programs.
7. Vacation. Executive shall be entitled to four (4) weeks annual vacation, to
be accrued and taken in accordance with the vacation policy of the Company for
similarly situated employees or executives.
8. Expenses. The Company will reimburse Executive for all reasonable business
expenses incurred by Executive in the performance of Executive's duties for the
Company, upon Executive's presentation to the Company of expense statements,
vouchers or other supporting information, in accordance with Company practices.
9. Confidentiality and Non-Competition. Executive has previously executed an
agreement entitled "Conditions of Employment," a copy of which is attached
hereto as Exhibit B, which contains express provisions regarding confidentiality
and non-competition (the "Confidentiality Agreement"). As further consideration
for this Agreement, and as a further inducement to the Company to enter into
this Agreement, Executive and the Company hereby acknowledge and reaffirm the
Confidentiality Agreement, and agree that the Confidentiality Agreement and all
terms, provisions and conditions of the Confidentiality Agreement shall continue
in full force and effect according to their terms.
10. Termination of Employment. Executive's employment shall terminate (a) upon
the discretion of the Company on not less than thirty (30) days prior written
notice, unless the Company terminates Executive for Cause, as defined in
Paragraph 11; (b) upon the death or permanent disability of Executive; or (c)
upon not less than sixty (60) days prior written notice to the Company by
Executive.
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a. General Severance. If Executive's employment is terminated solely upon
the discretion of the Company pursuant to (a), for any reason other
than for Cause, as defined in Paragraph 11, and except as provided in
Paragraph 12 in the event of a Change of Control, Executive will be
entitled to all amounts payable through the date of termination,
including pro-rated salary and accrued vacation earned but not yet
paid and any earned but unpaid bonus, the availability and pro rate
calculation of which shall be as determinated at the discretion of the
Board of Directors, plus severance according to the following formula:
(i) A base severance of twelve (12) months.
(ii) Executive also shall be entitled to continue his participation
in the Company's group medical plan and other benefit plans of
the Company, provided that, to the extent that, and as long as
continued participation is permitted under the terms and
provisions of such plans, until either the end of the total
severance term per 10.a.(i) above or until Executive becomes
eligible to participate in another employer's group medical,
insurance and retirement plan benefits, whichever is sooner.
(iii) All severance payments will be made prospectively on usual
Company paydays twice monthly at usual salary rates until the
entire severance is paid or until alternative employment is
achieved, whichever is sooner. During this severance period,
Executive agrees to pursue aggressively alternative full-time
employment opportunities.
b. Death or Voluntary Resignation. In the event of Executive's death
during the Employment Period, or Executive's voluntary resignation,
Executive or Executive's legal representative(s) will be entitled to
all amounts payable through the last date of employment, including
pro-rated salary earned but not yet paid and any earned bu unpaid
bonus, the availability and pro rate calculation of which shall be as
determined at the discretion of the Board of Directors.
11. Termination for "Cause." "Cause" shall mean the willful neglect of
Executive's duties which remains uncured for thirty (30) days after Executive
receives written notice thereof; Executive's conviction of a felony involving
moral turpitude; or any act of fraud or embezzlement by Executive involving the
Company. The Company may terminate Executive's employment for Cause at any time,
without prior written notice. If the Company terminates Executive's employment
for Cause, it shall have no further obligations to Executive under this
Agreement.
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12. Change of Control. Notwithstanding any provision in this Agreement to the
contrary, in the event that (a) any person or entity makes a tender or exchange
offer for shares of the Company's common stock pursuant to which such person or
entity acquires 25% or more of the issued and outstanding shares of the
Company's common stock, (b) the Company merges or consolidates with or into
another corporation or corporations, (c) the Company sells, transfers or
otherwise disposes of all or substantially all of its assets, or (d) any person
or entity acquires more than 25% of the Company's issued and outstanding voting
securities (any of which events shall constitute a "Change of Control" under
this Agreement), and employment is terminated thereafter, Executive shall
receive pro-rated salary earned but not yet paid and any earned but unpaid
bonus, the availability and pro rata calculation of which shall be as determined
at the discretion of the Board of Directors, plus severance according to the
following:
a. If during the first six months following Change of Control,
Executive's employment is terminated solely upon the discretion of the
Company pursuant to any reason other than for Cause, Executive will be
entitled to all amounts payable through the date of termination,
including pro-rated salary earned but not yet paid, accrued vacation,
and any earned but unpaid bonus plus a lump sum payment equal to
twelve months of severance plus benefits coverage per paragraph
10.(ii) above.
b. If Executive elects, for any reason, to terminate employment with the
Company within the first six (6) months upon Change of Control and on
at least thirty (30) days prior written notice, a total severance of
six (6) months base salary will be due.
c. If Executive elects, for any reason, to terminate employment with the
Company or its successor at any time no earlier than six (6) months
and no later than twelve (12) months after a Change of Control upon at
least sixty (60) days prior written notice, a total severance of nine
(9) months base salary will be due. Severance payments will be made
prospectively on usual Company paydays twice monthly at usual salary
rates until the entire severance is paid or until alternative
employment is achieved, whichever is sooner. During any severance
period, Executive agrees to pursue aggressively alternative full-time
employment opportunities. Executive also shall be entitled to continue
his participation in the Company's group medical plan and other
benefit plans of the Company during the above severance periods,
provided that, to the extent that, and as long as continued
participation is permitted under the terms and provisions of such
plans, until Executive becomes eligible to participate in another
employer's group medical, insurance and retirement plan benefits,
whichever is sooner.
d. If the Company or its successor terminates Executive's employment for
Cause pursuant to Paragraph 11 of this Agreement, there shall be no
further obligations to Executive under this Agreement.
13. Binding Effect; Successors. This Agreement is binding upon and shall inure
to the
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benefit of the parties hereto, and their respective heirs, legal
representatives, successors and assigns, subject to the following:
a. This Agreement is personal to Executive and shall not be assigned by
him.
b. The Company will require any successor in a Change of Control to
assume expressly and agree to perform this Agreement.
14. Notice. All notices required or permitted to be given under this Agreement
shall be given in writing and shall be deemed sufficiently given if delivered by
hand or mailed by registered mail, return receipt requested, to Executive's
respective address and the principal offices of the Company, both listed above.
By giving notice to the other party in accordance with this Paragraph, each
party may change the address at which it is to receive notices hereunder.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
16. Arbitration. Except for any rights the Company may have to apply to a court
of competent jurisdiction for specific performance or injunctive relief,
including but not limited to enforcement of the Confidentiality Agreement, any
other dispute arising or relating to the interpretation, validity, or
performance of this Agreement and any other dispute arising out of this
Agreement which cannot be resolved by the parties shall, upon thirty (30) days'
written notice by either party, be settled upon application of any such party by
arbitration in the County of Monmouth, New Jersey, or in reasonably close
proximity thereto, in accordance with the prevailing National Rules for the
Resolution of Employment Disputes of the American Arbitration Association (AAA),
and judgment upon the award rendered by the arbitrator may be entered in any
court of competent jurisdiction. The arbitration filing fee shall be advanced by
the initiating party and all other AAA administrative fees under this Paragraph
shall be shared equally by the parties to such a dispute, subject to
apportionment by the arbitrator in the award.
17. Independent Advice. Executive acknowledges that Executive has had the
opportunity to evaluate this Agreement independently and with Executive's own
professional advisors, and has not received and is not relying upon legal, tax
or other professional advice from or on behalf of the Company in connection with
entering into this Agreement.
18. Paragraph Headings. All paragraph headings are included herein for
convenience and are not intended to affect in any way the meaning or
interpretation of this Agreement.
19. Severability. In the event any provision of this Agreement is found to be
invalid or unenforceable, such provision shall be severable from the Agreement
and shall not affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect.
20. Entire Agreement. This Agreement constitutes the entire agreement between
the parties as to employment by the Company of Executive and may only be changed
by a written document
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signed by both parties. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
21. Prior Agreements. This Agreement hereby revokes, replaces and supersedes
any prior Employment Agreement between the Company and Executive.
In witness whereof, the parties have executed this Agreement, the Company
acting herein by its duly authorized officer.
PROGRAMMER'S PARADISE, INC.
BY:
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Xxxxx Xxxxxxx
President
XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
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