AGREEMENT AND GENERAL RELEASE
This Agreement and General Release (hereinafter "Agreement")
is entered into this 15th day of February, 2000, in the County of Maricopa,
State of Arizona, between Pinacor, Inc., a Delaware corporation ("Pinacor"), and
Xxxxx X. Xxxxxx ("Executive").
RECITALS
WHEREAS, Executive is serving as the President of Pinacor until
February 15, 2000;
WHEREFORE, the parties have agreed that it is in their respective best
interests to amicably resolve all matters relative to Executive's employment
with Pinacor and separation therefrom pursuant to the following terms and
conditions:
I.
Pinacor covenants and agrees to provide Executive with the severance
benefits specified in Paragraphs 1-9 on Exhibit A attached hereto (the
"Severance Benefits") and the additional benefits specified in Paragraph 10 on
Exhibit A attached hereto (the "Additional Benefits"). Executive covenants and
agrees to execute the resignation letter attached hereto as Exhibit B resigning
from his position as an officer of the companies listed on such exhibit. The
parties acknowledge and agree that the Severance Benefits provided to Executive
as set forth on Exhibit A are provided pursuant to Section 4.2 of the Employment
Agreement, dated as of August 1, 1998, by and among Pinacor, MicroAge, Inc., and
Executive (the "Employment Agreement"). The parties agree that Pinacor will not
provide the Additional Benefits hereunder until Executive signs and returns the
"Non-Revocation" form attached hereto as Exhibit C.
Executive's separation from employment with Pinacor will be effective
as of February 15, 2000 (the "Separation Date").
It is expressly understood and agreed that, other than the severance
benefits being provided to Executive pursuant to this Agreement, neither Pinacor
nor any of its affiliates is otherwise indebted to Executive for any other
damages, wages, benefits, or reimbursements.
II.
In exchange for the promises set forth in Paragraph I above, Executive
does hereby forever release, discharge, cancel, waive, and acquit, for himself
and for his marital community, heirs, executors, administrators and assigns,
Pinacor and any and all of its affiliates, subsidiaries, corporate parents,
agents, officers, owners, employees, attorneys, successors and assigns, of and
from any and all rights, claims, demands, causes of action, obligations,
damages, penalties, fees, costs, expenses, and liability of any nature
whatsoever which Executive has, had or may hereafter have against them or any of
them, arising out of, or by reason of any cause, matter, or thing whatsoever
existing as of the date of execution of this Agreement, WHETHER KNOWN TO THE
PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT OR NOT. This FULL WAIVER OF
ALL CLAIMS includes, without limitation, attorney's fees, any claims, demands,
or causes of action arising out of, or relating in any manner whatsoever to, the
employment and/or termination of the employment of Executive, such as, BUT NOT
LIMITED TO, any charge, claim, lawsuit or other proceeding arising under the
Civil Rights Act of 1866, 1964, Title VII as amended by the Civil Rights Act of
1991, the Americans with Disabilities Act, the Age Discrimination in Employment
Act (ADEA), the Labor Management Relations Act, the Employee Retirement Income
Security Act, the Consolidated Omnibus Budget Reconciliation Act, the Fair Labor
Standards Act, the Arizona Civil Rights Act, the Worker Adjustment and
Retraining and Notification Act, Xxxxxxx'x Compensation Claims, or any other
federal, state, or local statute. Executive further covenants and agrees not to
institute, nor cause to be instituted, any legal proceeding, including filing
any claim or complaint with any government agency alleging any violations of law
or public policy, against Pinacor and/or any and all of its affiliates,
subsidiaries, corporate parents, agents, officers, owners, employees, successors
and assigns premised upon any legal theory or claim whatsoever, including
without limitation, contract, tort, wrongful discharge, personal injury,
interference with contract, defamation, negligence, infliction of emotional
distress, fraud, or deceit, except to enforce the terms of this Agreement.
III.
The parties and their respective attorneys agree to hold in strict
confidence the terms and conditions of this Agreement. The parties covenant and
agree that neither they nor their attorneys will, either directly or through any
other person, agent or representative, discuss publicly or privately the nature
or content of this Agreement with any non-party to this Agreement, except as to
either party's accountants, any state tax department or the federal Internal
Revenue Service, or any other state or federal official in response to a
legitimate inquiry.
IV.
Executive, by his execution of this Agreement, avows that the following
statements are true:
A. That he has been given the opportunity and has in fact read this
entire Agreement, that it is in plain language, and he has had all questions
regarding its meaning answered to his satisfaction;
B. That he has been advised to seek independent advice and/or counsel
of his choosing and that he has been given the full opportunity to seek such
advice and/or counsel;
C. That he fully understands the contents of this Agreement and
understands that it is a FULL WAIVER OF ALL CLAIMS, including arbitration claims
and awards, including any rights under the ADEA and as to ADEA claims is not a
waiver of future claims;
D. That this FULL WAIVER OF ALL CLAIMS is given in return for valuable
consideration, as provided under the terms of this Agreement;
E. That he enters into this Agreement knowingly and voluntarily in
exchange for the promises referenced in this Agreement and that no other
representations have been made to him to induce or influence his execution of
this Agreement. Executive has been given at least twenty-one (21) days within
which to consider this Agreement before signing and seven (7) days
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following his execution of the Agreement to revoke this Agreement. The Agreement
shall not become effective or enforceable until the foregoing revocation period
has expired and Executive has signed and returned the "Non-Revocation" form
attached hereto as Exhibit C; and
F. That he understands his continuing obligations under the Employment
Agreement, including but not limited to his obligations (a) to maintain the
confidentiality of Confidential Information (ss. 5.1 of the Employment
Agreement), and (b) not to compete with Pinacor or its affiliates for a
twenty-four month period (ss. 5.9 of the Employment Agreement). Without limiting
the generality of Executive's non-competition obligations, during the
Non-Competition Period (as defined in Section 5.9(a) of the Employment
Agreement) Executive agrees that Executive will not, within the United States,
act as an agent, representative, consultant, officer, director, member,
independent contractor, or employee of Arrow Electronics, Inc.; Avnet, Inc.; CHS
Electronics, Inc.; Compaq Computer Corporation; CompuCom Systems, Inc.; CompUSA,
Inc.; Dell Computer; En Pointe Technologies, Inc.; Entex Information Services;
GE Capital; Hewlett-Packard; Ikon Office Solutions, Inc.; Inacom Corp; Xxxxxx
Micro, Inc.; Insight Enterprises Inc.; Integrated Information Systems; Merisel,
Inc.; Xxxxxxx Computer Resources, Inc.; Sarcom; Tech Data Corporation; Xerox
Connect; or any Affiliates or successors of the foregoing.
V.
The parties confirm their continuing obligations under Section 5.10 of
the Employment Agreement, which provides as follows:
During the term of this Agreement, the Non-Competition Period, the
Employee Non-Solicitation Period, and the Customer Non-Solicitation
Period, neither the Executive nor the Company will disparage the other,
and neither will disclose to any third party the conditions of
Executive's employment with the Company, except as may be required (i)
pursuant to applicable law or regulations, including the rules and
regulations of the Securities and Exchange Commission, (ii) to
effectuate the provisions of employee plans or programs and insurance
policies, or (iii) as may be otherwise contemplated herein or unless
such information becomes publicly available without fault of the party
making such disclosure.
VI.
This Agreement shall be governed in all respects, whether as to
validity, construction, capacity, performance, or otherwise, by the laws of the
State of Arizona, and no action involving this Agreement may be brought except
in the Superior Court for the State of Arizona or the Federal District Court for
the District of Arizona.
VII.
If any provision of this Agreement or the application thereof is held
to be invalid, void, or unenforceable for whatever reason, the remaining
provisions not so declared shall nevertheless continue in full force and effect
without being impaired in any manner whatsoever.
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VIII.
This Agreement constitutes the sole and entire Agreement between the
parties hereto, and supersedes any and all understandings and agreements made
prior hereto, other than the Employment Agreement. There are no collateral
understandings, representations, or agreements other than those contained herein
or in the Employment Agreement. It is understood and agreed that the execution
of this Agreement by Pinacor is not an admission of liability on its part to
Executive, but is an agreement to put to rest any claim of any kind whatsoever
relating to the employment relationship or otherwise, except that the parties
may enforce their respective rights under the Employment Agreement to the extent
they are not inconsistent with this Agreement.
IN WITNESS WHEREOF, the undersigned parties have signed this Agreement
on the date indicated herein.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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CAUTION! THIS IS A RELEASE! READ BEFORE SIGNING!
PINACOR, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
------------------------------
Its: Chairman of the Board
Date: March 2, 2000
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
------------------------------
Date: March 2, 0000
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XXXXXXXXXXXX
XXXXX XX XXXXXXX )
) ss.
County of Maricopa )
On this 2nd day of March, 2000, before me, the undersigned Notary Public,
personally appeared Xxxxx X. Xxxxxx, known to me to be the person whose name is
subscribed to the within instrument, and acknowledged that he executed the same
for the purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxxxx X. Xxxxx
-------------------------------
Notary Public
My Commission Expires August 23, 2000
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Exhibit A
Severance Benefits
1. Section 4.2 Payments. Pinacor and Executive acknowledge that
Executive is entitled to the following payments pursuant to Section 4.2 of the
Employment Agreement (all capitalized terms have the meanings ascribed to such
terms in the Employment Agreement):
A. Accrued Base Salary (Section 4.2(a)): Executive
acknowledges receipt of all Base Salary Payments through the Separation Date.
B. Accrued Vacation Payment (Section 4.2(b)): see Paragraph 2
below.
C. Accrued Reimbursable Expenses (Section 4.2(c)): see
Paragraph 3 below.
D. Accrued Benefits (Section 4.2(d)): See Paragraphs 4-5
below.
E. Accrued Annual Fixed Cash Bonus and Annual Incentive Bonus
(Section 4.2(e)): not applicable.
F. Exercise of Vested Options and Warrants (Section 2(f)): see
Paragraph 8 below.
2. Accrued Vacation Days. As of February 15, 2000, Executive had 264
hours of unused accrued hours, or 33 days (the "Accrued Vacation Days"). Pinacor
will reimburse Executive for such unused accrued vacation days in an amount
equal to Executive's current annual base salary ($350,000) less his 1999 MEP
waiver ($26,500) multiplied by a fraction, the numerator of which is the number
of unused accrued vacation days (33), and the denominator of which is 260. On or
promptly following the Separation Date, Pinacor will pay Executive $37,790.36
for these accrued unused vacation days.
3. Reimbursable Expenses. Pinacor will, in accordance with standard
policies, reimburse Executive for all reasonable travel and other expenses
incurred by Executive prior to the Separation Date and submitted for
reimbursement on or before March 15, 2000.
4. Medical and Dental Plans. As of the Separation Date, Pinacor will
cease making contributions to the monthly premiums it made while Executive was
an active Pinacor associate. Executive's monthly premiums are paid through
February 29, 2000. Executive will be entitled to 18 months of COBRA coverage
(through August 31, 2001) (the "COBRA Period"). Executive will be required to
pay the full COBRA premium in order to continue medical and/or dental benefits
during the COBRA Period. Any questions regarding COBRA coverage should be
directed to Xxx Xxxx at 000-000-0000 or Xxxxx Xxxxxxx at 000-000-0000.
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5. 401(k) Plan and Supplemental Savings Plan. Executive participates in
the Pinacor Retirement Savings Plan (the "401(k) Plan") and the Pinacor
Executive Supplemental Savings Plan (the "ESSP"). Executive has received
information regarding his options under the 401(k) Plan and the ESSP. Any
questions regarding the 401(k) Plan or the ESSP should be directed to Xxx Xxxx
at 000-000-0000 or Xxxxxxx Xxxxxx at 000-000-0000. As of the Separation Date, no
additional contributions will be made to the 401(k) Plan or the ESSP.
6. Split-Dollar Insurance Agreement. Executive and Pinacor entered into
a Split-Dollar Insurance Agreement, dated as of August 1, 1998 (the
"Split-Dollar Agreement"). Pinacor has paid the premium payments on the Policy
(as such term is defined in the Split-Dollar Agreement) through August 24, 2000.
By March 15, 2000, Executive may elect to retain the Policy by paying Pinacor an
amount equal to Pinacor's security interest in the Policy ($38,266.08). If
Executive does not elect to retain the Policy, Pinacor's obligations under the
Split-Dollar Agreement will terminate and Executive will transfer the Policy to
Pinacor pursuant to the Policy Change of Ownership attached hereto as Exhibit D.
Executive agrees to sign Exhibit D at the same time Executive signs this
Agreement. Pinacor will not cause the Policy to be transferred to Pinacor unless
Executive has not paid Pinacor the security interest in the Policy by March 16,
2000.
7. Disability Insurance. Executive currently has disability insurance
pursuant to the UNUM Disability Policy (the "UNUM Policy"). The UNUM Policy will
terminate as of the Separation Date. Any questions regarding the UNUM Policy
should be directed to Xxxxx Xxxxxx-Xxxxxx at 000-000-0000.
8. Stock Options (Non-MEP). During Executive's employment Executive was
granted the following stock options:
A. Pursuant to the 1994 Long-Term Incentive Plan Grant Letter,
dated as of December 14, 1994 (the "1994 Grant Letter"), Executive was
granted the option to purchase a total of 3,000 shares of Common Stock
at an exercise price of $10.88 per share. Pursuant to the terms of the
1994 Grant Letter, on or before the Separation Date, Executive is
entitled to purchase up to 1,800 shares of Common Stock at an exercise
price of $10.88 per share. In accordance with the terms of the 1994
Grant Letter, all options thereunder will terminate on the Separation
Date.
B. Pursuant to the 1994 Stock Option Plan Grant Letter, dated
as of March 15, 1995 (the "March 1995 Grant Letter"), Executive was
granted the option to purchase a total of 3,000 shares of Common Stock
at an exercise price of $9.25 per share. Pursuant to the terms of the
March 1995 Grant Letter, on or before the Separation Date, Executive is
entitled to purchase up to 1,200 shares of Common Stock at an exercise
price of $9.25 per share. In accordance with the terms of the March
1995 Grant Letter, all options thereunder will terminate on the
Separation Date.
C. Pursuant to the 1994 Stock Option Plan Grant Letter, dated
as of December 13, 1995 (the "December 1995 Grant Letter"), Executive
was granted the
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option to purchase a total of 3,000 shares of Common Stock at an
exercise price of $8.75 per share. Pursuant to the terms of the
December 1995 Grant Letter, on or before the Separation Date, Executive
is entitled to purchase up to 1,800 shares of Common Stock at an
exercise price of $8.75 per share. In accordance with the terms of the
December 1995 Grant Letter, all options thereunder will terminate on
the Separation Date.
D. Pursuant to the 1994 Long-Term Incentive Plan Incentive
Stock Option Award, dated December 4, 1996 (the "1996 Incentive
Award"), Executive was granted the option to purchase a total of 30,000
shares of Common Stock at an exercise price of $24.00 per share.
Pursuant to the terms of the 1996 Incentive Award, on or before the
Separation Date, Executive is entitled to purchase up to 18,000 shares
of Common Stock at an exercise price of $24.00 per share. In accordance
with the terms of the 1996 Incentive Award, all options thereunder will
terminate on the Separation Date.
E. Pursuant to the 1994 Long-Term Incentive Plan Incentive
Stock Option Award, dated April 2, 1998 (the "1998 Incentive Award"),
Executive was granted the option to purchase a total of 40,000 shares
of Common Stock at an exercise price of $14.35 per share. Pursuant to
the terms of the 1998 Incentive Award, on or before the Separation
Date, Executive is entitled to purchase up to 8,000 shares of Common
Stock at an exercise price of $14.35 per share. In accordance with the
terms of the 1998 Incentive Award, all options thereunder will
terminate on the Separation Date.
F. Pursuant to the 1997 Long-Term Incentive Plan Stock Option
Award, dated January 28, 1999 (the "January 1999 Incentive Award"),
Executive was granted the option to purchase a total of 50,000 shares
of Common Stock at an exercise price of $16.56 per share. Pursuant to
the terms of the January 1999 Incentive Award, on or before the
Separation Date, Executive is entitled to purchase up to 10,000 shares
of Common Stock at an exercise price of $16.56 per share. In accordance
with the terms of the January 1999 Incentive Award, all options
thereunder will terminate on the Separation Date.
G. Pursuant to the 1997 Long-Term Incentive Plan Stock Option
Award, dated April 5, 1999 (the "April 1999 Incentive Award"),
Executive was granted an option to purchase a total of 50,000 shares of
Common Stock at an exercise price of $5.44 per share. As of the
Separation Date, none of the options under the April 1999 Incentive
Award had vested. In accordance with the terms of the April 1999
Incentive Award, all options thereunder will terminate on the
Separation Date.
H. Pursuant to the 1997 Long-Term Incentive Plan Stock Option
Award, dated December 2, 1999 (the "December 1999 Incentive Award"),
Executive was granted an option to purchase a total of 50,000 shares of
Common Stock at an exercise price of $4.1875 per share. As of the
Separation Date, none of the options under the December 1999 Incentive
Award had vested. In accordance with the terms of the
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December 1999 Incentive Award, all options thereunder will terminate on
the Separation Date.
9. Management Equity Programs.
A. Pursuant to the 1997 Management Equity Program Award
Agreement, dated November 4, 1996, as amended (the "1997 MEP
Agreement"), Executive had the right to receive 59,574 options as a
result of his election to restructure his compensation package by
reducing his compensation. In accordance with the terms of the 1997 MEP
Agreement, as of the Separation Date, Executive has obtained 59,574
vested options under the 1997 MEP Agreement by reducing his
compensation. Following the Separation Date, these options will
continue to vest in accordance with the terms of the 1997 MEP
Agreement.
B. Pursuant to the 1999 Management Equity Program Award
Agreement dated, April 23, 1999 (the "1999 MEP Agreement"), Executive
had the right to receive up to 18,043 options as a result of his
election to waive a portion of his salary during the period from May 1,
1999 through May 1, 2000. In accordance with the terms of the 1999 MEP
Agreement, on the Separation Date, Executive has obtained 14,284
options under the 1999 MEP Agreement by reducing his compensation
($20,979.16 waived through February 15, 2000 divided by $5.875 (common
stock closing price on April 23, 1999) multiplied by 4 (the leverage
factor)). Following the Separation Date, these options will continue to
vest in accordance with the terms of the 1999 MEP Agreement.
10. Extension of Options. Pursuant to a unanimous written consent dated
as of February 15, 2000, the Compensation Committee extended the exercise period
of all that had vested as of the Separation Date, as described in Section 8,
paragraphs A-F above, for twelve (12) months after the Separation Date.
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Exhibit B
February 15, 2000
To the Board of Directors of each of the corporations attached hereto as
Schedule 1:
I hereby resign my positions as an officer of Pinacor, Inc. and its
subsidiaries and affiliates, including each of the corporations attached hereto
as Schedule 1, effective as of February 15, 2000.
Sincerely,
/s/ Xxxxx X. Xxxxxx
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Schedule 1
COMPANY POSITION
------- --------
Pinacor, Inc. President
Complete Distribution, Inc. President
ConnectWorks, Inc. President
Contract PC, Inc. President
InterPC DE BOLIVIA President
InterPC DE COLOMBIA President
InterPC DE ECUADOR President
InterPC DE VENEZUELA President
Pinacor Logistics Services, Inc. President
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Exhibit C
Non-Revocation
As of the Date Shown on This Form
By signing below, I hereby verify that I have chosen not to revoke my agreement
to, and execution of, the Agreement and General Release. My signature confirms
my renewed agreement to the terms of that Agreement, including the release and
waiver of any and all claims relating to my employment with the Employer and its
successors, assigns, and affiliated companies, and/or the termination of that
employment
/s/ Xxxxx X. Xxxxxx
-------------------------------------------------------------
Xxxxx X. Xxxxxx* Date: March 17, 2000
*Do not sign, date, or return this document until eight (8) days after you sign
the Agreement and General Release. The signed and dated document should be
returned to Xxxxx X. Xxxxx, Pinacor, Inc., 0000 Xxxxx XxxxxXxx Xxx, XX #00,
Xxxxx, Xxxxxxx 00000-0000.
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VERIFICATION
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 17th day of March, 2000, before me, the undersigned Notary Public,
personally appeared Xxxxx X. Xxxxxx, known to me to be the person whose name is
subscribed to the within instrument, and acknowledged that he executed the same
for the purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Notary Public
My Commission Expires August 23, 2000
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Exhibit D
(Policy Change of Ownership)
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