EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Agreement is dated as of the 14th day of April, 1997,
between Campo Electronics, Appliances and Computers, Inc. (the
"Company") and Xxxx X. Xxxx (the "Employee").
1. Employment/Capacity. The Company agrees to and does
hereby employ the Employee, and the Employee agrees to and does
hereby remain in the employ of the Company, upon the terms and
conditions set forth in this Agreement. Such employment shall be
in the capacity of Vice President - Marketing, subject to the
supervision of the Company's Board of Directors and Chief
Executive Officer. Such employment shall commence on the date of
this Agreement (the "Effective Date") and shall continue until
the first anniversary of the date of this Agreement unless sooner
terminated as provided in this Agreement. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to
include the period subsequent to the Effective Date through the
earlier of termination of Employee's employment with the Company
or the first anniversary of the date of this Agreement; however,
such phrase shall not be construed as limiting the enforceability
by either party of any rights provided for in this Agreement.
2. Time and Effort/Absences. During the term of this
Agreement, the Employee shall devote his entire time and
attention during normal business hours to the Company's business,
and he shall not engage in any other business activity whether or
not for gain, profit or other pecuniary advantage, but nothing
shall be construed to restrict him (i) from performing services
as a member of the Board of Directors, Board of Trustees or the
like of any non-profit or for-profit entity whether or not he
receives compensation therefor, provided that such services do
not unreasonably interfere with his ability to perform the
services and discharge his responsibilities hereunder, (ii) from
investing his assets in such form or manner as will not require
any services on his part in the operation of the business of the
entity in which such investment is made, and/or (iii) from
serving in various capacities with, and attending meetings of,
industry groups and associations relevant to the Company's
business.
3. Corporate Offices. If elected, the Employee will
serve, without additional compensation, as a director of the
Company and/or as an officer and director (or in either capacity)
of any subsidiary of the Company. The Company agrees during
Employee's employment hereunder to:
(i) maintain, if available at a cost acceptable to the
Board of Directors in its discretion, director and officer
liability insurance for the Employee in connection with his
serving in all such capacities in an amount and on such
terms as are currently in effect for officers and directors
of the Company or, if reduced, as are reasonably
satisfactory to the Employee; and
(ii) use its reasonable best efforts to maintain the
director and officer exculpation and indemnification
provisions currently provided in its Articles of
Incorporation and By-laws and, if Louisiana law at any time
permits more protection than currently provided, use its
best efforts to add such additional protection.
4. Salary/Bonus/Other Benefits. In consideration of the
services and duties to be rendered and performed by the Employee
during the term of this Agreement, the Company agrees that it
will, during the term of this Agreement, pay and provide for the
Employee the compensation and benefits described below and
described elsewhere in this Agreement and the Appendices hereto:
a. Salary. A salary, payable in equal bi-weekly
installments, at the annualized rate provided in Appendix A
hereto, or in such greater amount as may from time to time be
fixed by the Board of Directors of the Company or any duly
authorized committee thereof. The Employee's salary rate shall
not be reduced without his written consent.
b. Bonus. A bonus or bonuses in such amount as
described and as may from time to time be fixed in accordance
with Appendix A hereto.
c. Other Benefits. The other payments and/or
benefits described in Appendix B hereto.
d. Withholding. All such payments shall be net of
applicable withholding for taxes and other required amounts
("Withholding").
5. Expenses. The Employee shall be reimbursed for out-of-
pocket expenses incurred from time to time on behalf of the
Company or any subsidiary in the performance of his duties under
this Agreement, upon the presentation of such supporting
documents and forms as the Company shall reasonably request.
6. Disability. If the Employee becomes Disabled (such term
is used as defined in Section 1.5 of the Company's Severance Pay
Plan and Summary Plan Description) during the term of this
Agreement the Company shall have the continuing right and option
while such disability continues by notice in writing to the
Employee to terminate this Agreement effective thirty days after
such notice is so given, unless within such thirty day period he
becomes capable of rendering full time services of the character
contemplated hereby and he resumes such services. If the
Employee becomes Disabled, as aforesaid, the Company shall be
obligated to provide to him the amounts and benefits described in
Appendix C hereto (less Withholding) in lieu of all other amounts
and benefits provided by this Agreement.
7. Death. If Employee dies during the term of this
Agreement, this Agreement will terminate and the Company shall be
obligated to provide his personal representative(s) and/or his
beneficiaries with the amounts and death benefits described in
Appendix C hereto (less Withholding) in lieu of all other amounts
and benefits provided by this Agreement.
8. Severance or Termination Pay and Benefits. If the
employment of the Employee is terminated at any time during the
term of this Agreement (i) by him for Good Reason (as defined in
Paragraph 9 hereof) or (ii) by the Company for any reason other
than for Cause (as hereafter defined), the Company shall be
obligated to pay to him the severance pay and benefits described
in Appendix D hereto (less Withholding) in lieu of all other
amounts and benefits provided by this Agreement. If the
employment of Employee is terminated at any time during the term
of this Agreement (i) by him without Good Reason or (ii) by the
Company for Cause, the Company shall be obligated to pay the
Employee the termination and other benefits described in Appendix
E hereto (less Withholding) in lieu of all other amounts and
benefits provided by this Agreement. Termination of the
Employee's employment on account of his Disability or death will
not require the Company to pay and provide any amounts and
benefits pursuant to Appendix D or E, but instead to pay and
provide the amounts and benefits described in Appendix C.
As used herein, the term "Cause" means (i) the willful and
continuing failure by the Employee to perform substantially the
services contemplated (other than any such failure resulting from
his Disability) within a reasonable period of time after a
written demand for substantial performance is delivered to him by
a duly authorized member or representative of the Company's Board
of Directors which specifically identifies the manner in which
it is alleged that he has not substantially performed such
services, or (ii) the willful engaging by him in misconduct
materially injurious to the Company.
9. Termination by the Employee for Good Reason.
a. The termination by the Employee of his employment
for "Good Reason" during the term of this Agreement shall be
deemed a justifiable termination of his employment and shall
excuse him from the obligation to render services under or
relating to this Agreement. In that event the Company shall be
obligated to pay to the Employee the amounts and benefits
described in Appendix D hereto in lieu of all others provided by
this Agreement. As used herein, the term "Good Reason" means:
1. the occurrence of any of the following: (i)
a change by the Company in his status, title or position(s) as an
officer of the Company which does not represent a promotion from
or enhancement of his status, title and position, or (ii) the
assignment of any duties, responsibilities which are inconsistent
with such status, title or position, or (iii) any removal of the
Employee from or any failure to reappoint or reelect him to his
position except in connection with a justifiable termination by
the Company of his employment for Cause or on account of
Disability or death or the termination by the Employee of his
employment other than for Good Reason, or (iv) the exclusion from
meetings, or decision-making processes, or the withholding of
data which would be valuable and appropriate to an executive
officer of the Company, or germane to the function of Vice
President of Marketing, provided in each such case described in
clauses (i), (ii), (iii) or (iv) that the same continues for 10
days after written notice thereof by the Employee to the Company
specifying the alleged occurrence; or
2. a reduction in his salary rate or a failure
by the Company to pay to the Employee when due any installment of
salary and/or any bonus required pursuant to Appendix A or to pay
when due any other amounts owing under or relating to this
Agreement, or to perform any of the Company's material
obligations under this Agreement, which reduction or failure in
any such case continues for a period of ten days after written
notice thereof is given by him to the Company; or
3. the Company's requiring him to be based
anywhere other than within a 75-mile radius of the New Orleans,
Louisiana area except for required travel in the ordinary course
of the Company's business.
b. The filing by or against the Company of an application
seeking protection under the federal bankruptcy laws, or the
granting of such application, shall not of itself constitute Good
Reason, but the failure of the Company to satisfy Paragraph 27
shall constitute Good Reason.
c. Employee's right to terminate his employment for Good
Reason during the term of this Agreement shall continue in effect
until the Company notifies Employee in writing that Good Reason
exists specifying the provision of the Agreement giving rise to
the right to terminate and Employee fails to exercise such right
within 60 days of actual receipt of such notice. Any such
failure to exercise shall not prevent Employee from exercising
the right to terminate for Good Reason with respect to any new
occurrence constituting Good Reason that follows such failure and
is not a continuation of a prior such occurrence.
10. Notice of Termination. Any purported notice of
termination by the Company or the Employee of the Employee's
employment shall be communicated in a writing delivered to the
other party as provided in Paragraph 18 hereof (hereinafter a
"Notice of Termination"). Any such Notice of Termination that
purports to terminate Employee's employment for Cause or for Good
Reason shall specify the termination provision relied upon by the
party giving such notice and shall set forth in detail such facts
and circumstances claimed to provide a justified basis for
termination under the provision(s) so indicated.
11. Trade Secrets, Etc. Upon the termination of his
employment, the Employee agrees forthwith to deliver up to the
Company, and, during the term of this Agreement and for 15 years
thereafter, not to disclose to any person, firm, corporation,
association or other entity other than the Company (a "Third
Person") for any reason or purpose whatsoever other than as
authorized by the Company or as required by law or as necessary
to the performance of his duties to the Company, any confidential
data in his possession, whether produced by the Company or by
him, relating to the Company's business or any past, current or
prospective activity of the Company.
12. Customer List. The Employee recognizes and
acknowledges that any written list(s) of the customers, suppliers
and/or vendors of the Company, its subsidiaries and affiliates,
is a valuable, special and unique asset. The Employee agrees
that he will not during the term of this Agreement or within 15
years thereafter, use for his own personal benefit or disclose
any such written list or any part thereof, to any Third Person
for any reason or purpose whatsoever.
13. [Omitted]
14. Injunctive Relief. In the event of a breach or threat-
ened breach by the Employee of the provisions of Paragraph 11 or
12 of this Agreement during or after the term of this Agreement,
the Company shall be entitled to an injunction restraining the
Employee from violation of such paragraph. Nothing herein shall
be construed as prohibiting the Company from pursuing any other
remedy it may have in the event of breach of this Agreement by
the Employee.
15. Certain Proprietary Rights. The Employee agrees to and
hereby does assign to the Company all his right, title and
interest in and to all inventions, business plans, work models or
procedures, whether or not patentable, which are made or
conceived solely or jointly by him:
a. At any time during the term of his employment by
the Company and during the course of or in connection with his
duties during the term of this Agreement, or
b. With the use of time or materials of the Company.
The Employee agrees to communicate to the Company or its
representatives all facts known to him concerning such matters,
to sign all rightful papers, make all rightful oaths and
generally, at the Company's expense to do everything reasonably
practicable (without expense to the Employee) to aid the Company
in obtaining and enforcing proper legal protection for all such
matters in all countries and in vesting title to such matters in
the Company. At the Company's request (during or after the term
of this Agreement) and expense, the Employee will promptly
execute a specific assignment of title to the Company, and
perform any other acts reasonably necessary to implement the
foregoing assignment.
16. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of:
a. The Company, and any successors or assigns of the
Company, whether by way of a merger or consolidation, or by way
of the Company selling all or substantially all of the assets of
the Company, to a successor entity, or otherwise; however, in the
event of the assignment by the Company of this Agreement, the
Company shall nevertheless remain liable and obligated to the
Employee in accordance with the terms hereof; and
b. The Employee, his estate, his executors,
administrators, heirs and beneficiaries, none of whom shall be
permitted to assign this Agreement or any rights or obligations
hereunder.
17. Expenses Relating to Enforcement of Rights. The
Company agrees to pay as incurred, to the full extent permitted
by law, all reasonable time-based legal fees and expenses which
the Employee may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Employee
or others of the validity or enforceability of, or liability
under, any provision hereof (including as a result of any contest
by the Employee about the amount of any payment pursuant to this
Agreement), provided that if it is determined by a court that the
position of Employee in any such contest is unreasonable or
frivolous, he shall be required to reimburse the Company for his
legal fees and expenses so paid by the Company.
18. Notices. Any notice or other communication required
under this Agreement shall be in writing, shall be deemed to have
been given and received when delivered in person, or, if mailed,
shall be deemed to have been given when deposited in the United
States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and
shall be addressed as follows:
If to the Company, addressed to:
Chief Executive Officer
Campo Electronics, Appliances and Computers, Inc.
000 Xxxxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxxxx, XX 00000
with a copy to:
Xxxxxxx Xxxxxxxx Casteix, Esq.
Barrios Kingsdorf & Casteix, L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
If to the Employee, addressed to:
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
or such other address as to which any party hereto may have
notified the other in writing.
19. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Louisiana.
20. Entire Agreement. This Agreement, including Appendices
A through E, inclusive, all of which are herein incorporated by
reference and made a part hereof, and the documents referred to
herein, contain the entire understanding between the Employee and
the Company relating to the employment of the Employee by the
Company during the term of this Agreement. No provision of this
Agreement, including the Appendices, may be modified or amended
except by an instrument in writing signed by both parties.
21. Severability. If any term or provision of this Agree-
ment, or the application thereof to any person or circumstance,
shall at any time or to any extent be invalid or unenforceable,
the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Agreement shall be
valid and enforced to the fullest extent permitted by law.
22. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
23. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all other
rights and remedies provided to them by applicable law, rule or
regulation.
24. Beneficiaries. Whenever this Agreement provides for
any payment to be made to the Employee's estate, such payment may
be made instead to such beneficiary or beneficiaries as the
Employee may have designated in writing and filed with the
Company. The Employee shall have the right to revoke any such
designation from time to time and to redesignate any beneficiary
or beneficiaries by written notice to the Company.
25. No Obligation to Mitigate Damages. The Employee shall
not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the
Employee as a result of employment by another employer or by
retirement or by other benefits, either before the date of this
Agreement or after the date of termination of his employment with
the Company under this Agreement.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
27. Bankruptcy Matters. The Company shall take all
necessary steps reasonably available to it so that amounts
payable hereunder shall not be subject to avoidance if the
Company comes under the protection of the federal bankruptcy
laws.
28. Continuation. Employee's employment under the terms of
this Agreement shall not be automatically continued beyond the
termination of this Agreement even if Employee's employment by
the Company continues thereafter. Any continuation of this
Agreement shall only be by express written agreement of Employee
and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ XXX X. XXXXXX, XX.
/s/ XXXX X. XXXX
Xxxx X. Xxxx
APPENDIX A
SALARY AND BONUSES
A. Salary. The annualized salary rate of Employee during
the term of the Agreement shall be $125,000 (the "Base Salary").
B. Performance Bonus. The Company shall pay to the
Employee, upon execution of this Agreement, a one-time
performance bonus of $25,000 in consideration of services
previously performed by Employee for the Company.
C. Incentive Bonus. The Company shall pay to the Employee
a bonus of up to $25,000.00 (the "Incentive Bonus") in a lump sum
payment made within 15 days after the first anniversary of the
date of this Agreement, the amount of which bonus shall be based
upon the Company having achieved the following name and market
share criteria (the "Bonus Criteria") as confirmed by unaided
recall independent market research in not less than 50% of the
markets (the "Sample Markets") in which Campo has conducted
business for a period of not less than 12 consecutive months:
(i) consumers continue to identify
Campo as the Number One or Number
Two retailer in appliances, home
electronics and home office
products in such Sample Markets;
and
(ii) consumers continue to identify
Campo as the Number One or Number
Two retailer "shopped-first" for
appliances, home electronics and
home office products in such Sample
Markets.
For purposes of establishing the Bonus Criteria, "independent
market research" may be determined by any of the following
methods: (a) research contracted for by the Company itself, or in
partnership with local newspapers in the Sample Markets, or (b)
through commercial market reports, if available in the Sample
Markets. The Sample Markets shall be selected by the Board of
Directors. To the extent that the Company chooses not to obtain
independent market research for all of the Sample Markets
selected and no other independent market research is available to
determine whether the Bonus Criteria has been satisfied in the
requisite percentage of Sample Markets (50%), the requisite
percentage shall be reduced to 50% of the Sample Markets for
which independent market research has been obtained or otherwise
exists. In the event that the only one of the two Bonus Criteria
has been satisfied, the amount of the Incentive Bonus to be paid
to the Employee shall be $12,500.00. If neither criteria is
satisfied, no bonus will be due to the Employee.
D. Incentive Compensation. The Company's Board of
Directors shall use its reasonable best efforts to develop, as
soon as is practicable, and in no event later than 120 days after
the date of the Agreement, an executive incentive compensation
program in which Employee shall be eligible to participate. The
program shall be developed after consultation with an executive
compensation consultant, and Employee's rewards under such
program shall be based on goals designed to return the Company to
a profitable position during the term of this Agreement or the
Employee's continued employment with the Company following such
term.
E. Accelerated Vesting of Stock Option. Within ten
business days after the date of this Agreement, the Company and
Employee will enter into an agreement amending the Non-Qualified
Stock Option Agreement (the "Option Agreement") entered into as
of October 4, 1996 by and between the Company and the Employee to
eliminate the vesting criteria set forth in Section 2 of the
Option Agreement and to provide that 100% of the Option to
purchase 50,000 shares of the Company's common stock at the
Exercise Price shall be exercisable by Employee six months from
the date of this Agreement.
APPENDIX B
OTHER BENEFITS
During the term of the Agreement:
A. Vacation. The Employee shall be entitled to three
weeks of noncumulative paid vacation time per year of employment.
B. Medical Benefits. The Employee shall be entitled to
participate in the medical benefit plans provided by the Company
from time to time to its executive officers generally.
C. Other Benefits. The Employee shall be eligible to
participate in any other benefit program provided by the Company
from time to time to its executive officers generally.
APPENDIX C
DEATH OR DISABILITY
In the event of a termination of the Employee's employment
during the term of the Agreement for the Employee's death or
Disability, the Employee shall be entitled to payment within not
less than 30 days from the date of termination of (a) his salary
through the date of termination to the extent not already paid,
and (b) his Performance Bonus, to the extent not already paid.
APPENDIX D
SEVERANCE
Severance pay and benefits to be provided to the Employee if
the Employee is terminated during the term of the Agreement by
the Company without Cause or the Employee terminates his
employment during the term of the Agreement for Good Reason are
as follows: (a) the Company shall pay to the Employee the amounts
that would be due (at the times they would be due) had employment
terminated by reason of death or Disability and, in addition, an
amount (payable within 30 days after termination of employment)
equal to the additional salary and benefits Employee would have
received had his employment terminated six months after its
actual termination, less any portion thereof that has previously
been paid and less any severance benefits that are payable to
Employee under the Company's Severance Pay Plan with respect to
any "change of control" that occurs prior to the termination of
Employee's employment; and (b) for a period ending on the earlier
of (i) 6 months from the date of termination of Employee's
employment or (ii) Employee's obtaining other full-time permanent
employment, the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services that are
reasonable in scope and cost in relation to his position.
APPENDIX E
TERMINATION
If the employment of Employee is terminated at any time
during the term of the Agreement (i) by Employee without Good
Reason, or (ii) by the Company for Cause, the Company shall be
obligated to Employee only for payment within not less than 30
days from the date of termination of his salary through the date
of termination, to the extent not previously paid.
