EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective the 17th day of June, 1998, by and between
XXXXXXX X. XXXXXXXX, an individual residing in the County of Xxxxxx, Michigan
(the "Executive") and OPEN PLAN SYSTEMS, INC., a Virginia corporation with
corporate offices located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx (the
"Company").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Management and Consulting
Agreement, dated June 17, 1998, between the Company and Great Lakes Capital,
Inc., the Company has appointed the Executive to the position of Chief Financial
Officer of the Company and wants to assure itself of the benefit of the
Executive's services and experience; and
WHEREAS, the Executive has assumed the position of Chief Financial Officer
and is willing to work in the employ of the Company upon the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
I. Term Of Employment.
(A) The term of the employment of the Executive under this Agreement shall
be for an eighteen (18)-month period commencing on June 17, 1998, and ending on
December 16, 1999.
(B) Notwithstanding the foregoing provision (A) of this Section I., the
term of employment of the Executive under this Agreement shall be subject to
earlier termination by:
(1) determination of disability of the Executive pursuant to Section IV.;
or
(2) dismissal of the Executive from his position as Chief Financial Officer
pursuant to resolution by the Board of Directors of the Company; or
(3) death of the Executive;
provided, however, that
(i) in the event of termination for determination of disability pursuant to
Paragraph (1) above, Section IV. shall apply;
(ii) in the event of termination pursuant to Paragraph (2) above for
"proper Cause" (defined in Section V.(A)), Section V.(B) shall apply;
(iii) in the event of termination pursuant to Paragraph (2) above without
"Proper Cause" (defined in Section V.(A)), Section VI. shall apply; or
(iv) in the event of termination due to the death of the Executive pursuant
to Paragraph (3) above, Section VII. shall apply.
II. Services To Be Rendered.
The Company agrees to employ the Executive as the Chief Financial Officer
of the Company, subject to the terms, conditions and provisions of this
Agreement. The Executive hereby accepts such employment and agrees that he shall
devote the proper degree of skill and diligence in rendering services to the
Company under this Agreement. The Executive shall report to and be subject to
the direction of the Board of Directors of the Company. The Executive agrees
that his employment as Chief Financial Officer of the Company pursuant to this
Agreement is a full time position, based at the Company's headquarters located
in Richmond, Virginia and that Executive will relocate to Richmond, Virginia for
the purpose of fulfilling his obligations hereunder. The Executive shall not
accept or retain any position as a director, officer, employee or agent of any
for-profit business organization which is unaffiliated with the Company without
prior approval of the Board of Directors of the Company (which approval will not
be unreasonably withheld).
III. Compensation.
In consideration for the services rendered to the Company under this
Agreement, the Company shall pay and provide to the Executive the following
compensation and benefits:
(A) Salary.
The Company shall pay the Executive an annual base salary of $120,000.00,
payable in twelve equal monthly installments on the Company's regularly
scheduled pay days and commencing with the first pay day following the date of
this Agreement. This annual base salary shall be reviewed annually by the
Compensation Committee of the Board of Directors (the "Compensation Committee")
to consider appropriate increases, but in no event shall the amount of the base
salary be reduced.
(B) Annual Incentive Bonus.
In addition to the base salary to be paid to the Executive under Section
III.(A), the Executive shall also be entitled to an annual incentive bonus as
established and modified, from time to time, by the Compensation Committee.
(C) Ancillary Benefits.
(1) The Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses approved in writing by the Chairman of the Board of
Directors of the Company, which approval shall not be unreasonably withheld,
incurred by the Executive in connection with his relocation to Richmond,
Virginia.
(2) The Executive shall also be entitled to other ancillary benefits
provided by the Company, consistent with the compensation policies and practices
of the Company from time to time, prevailing with respect to persons who are
executive officers of the Company.
IV. Disability.
(A) The term of employment of the Executive may be terminated at the
election of the Company upon a determination by the Board of Directors of the
Company, made based upon a qualified medical opinion, that the Executive will be
unable, by reason of physical or mental incapacity, to perform the reasonably
expected or customary duties of Chief Financial Officer of the Company on a
full-time basis for a period longer than three (3) consecutive months or more
than six (6) months in any consecutive twelve (12)-month period. In the exercise
of its determination, the Board of Directors shall give due consideration to the
opinion of the Executive's personal physician or physicians and to the opinion
of any physician or physicians selected by the Board of Directors for these
purposes. If the Executive's personal physician disagrees with the physician
retained by the Company, the Board of Directors will retain an impartial
physician selected by the Executive's personal physician and the Company's
physician and the opinion of the impartial physician shall be binding upon the
Company and the Executive. The Executive shall submit to examination by any
physician or physicians so selected by the Board of Directors, and shall
otherwise cooperate with the Board of Directors in making the determination
contemplated hereunder, such cooperation to include, without limitation,
consenting to the release of information by any such physician(s) to the Board
of Directors. Notwithstanding the foregoing, the Corporation shall comply with
all requirements of the Americans with Disabilities Act, 42 U.S.C. 12101 et.
seq.
(B) In the event of such termination for disability, the Company shall
thereupon be relieved of its obligations to pay any compensation and benefits
under Section III., except for accrued and unpaid items, but shall, in addition,
pay to the Executive such disability compensation as set forth in any disability
plan established by the Company for its executive offices.
V. Termination For Proper Cause.
(A) The occurrence of any of the following events shall constitute "Proper
Cause" for termination of the employment of the Executive under this Agreement,
at the election of the Board of Directors of the Company:
(1) the Executive shall voluntarily resign as a director, officer or
employee of the Company without the prior written consent of the Board of
Directors of the Company;
(2) the Executive shall fail to favorably perform as Chief Financial
Officer based on a reasonable determination made by the Board of Directors of
the Company and fail to cure such deficient performance within five (5) calendar
days after receiving notice of such deficient performance from the Company;
(3) the Executive shall fail to fulfill his duties and obligations as Chief
Financial Officer on a full time basis from the Company's headquarters located
in Richmond, Virginia except as otherwise agreed or approved by the Chairman of
the Board of Directors of the Company;
(4) the Executive shall breach this Agreement in any material respect and
fail to cure such breach within five (5) calendar days after receiving written
notice of such breach from the Company; or
(5) the commission of a fraud, or other criminal act, by the Executive
directly involving the Company or any Affiliates of the Company which would
constitute a felony if prosecuted under criminal law.
(B) In the event of termination of the Executive's employment pursuant to
Section I.(B)(2) for Proper Cause, the Company shall thereupon be relieved of
its obligations to pay any compensation and benefits under Section III., except
for accrued and unpaid items.
VI. Termination Without Proper Cause.
In the event of termination of the Executive pursuant to Section I.(B)(2)
without Proper Cause (as defined in Section V.(A) above), the Company shall
thereafter be and remain obligated to pay to the Executive (or his estate or
designated beneficiary) the compensation and benefits provided under Section
III.(A) and III.(B) and such benefits under III.(C) as are payable to a
terminated employee until expiration of the eighteen (18)-month term of
employment established by Section I.(A). In the event of a dispute as to whether
Executive was terminated for or without "Proper Cause," or regarding the amount
of compensation Executive is entitled to receive under this Section VI., the
Company shall be obligated to continue to pay to the Executive (or his estate or
designated beneficiary) all of the compensation and benefits reserved under
Section III. until the dispute is resolved by an arbitrator pursuant to Section
XVII. hereof.
VII. Death.
In the event of termination of the Executive's employment pursuant to
Section I.(B)(3) above, the Company shall pay the Executive's estate or
designated beneficiary such death benefits as may be set forth in any life
insurance plan established by the Company for its executive officers plus all
accrued and unpaid items.
VIII. Confidentiality.
For purposes of this Agreement, "Confidential Information" shall mean any
information of a proprietary or confidential nature and trade secrets of the
Company and Affiliates of the Company relating to the business of the Company
and Affiliates of the Company that have not previously been publicly released by
duly authorized representatives of the Company. The Executive agrees to regard
and preserve as confidential all Confidential Information pertaining to the
Company's business that has been or may be obtained by the Executive in the
course of his employment with the Company, whether he has such information in
his memory or in writing or other physical form. The Executive shall not,
without written authority from the Company to do so, use for his personal
benefit or his personal purposes, unrelated to business of the Company, nor
disclose to others, either during the term of his employment hereunder or for
five (5) years thereafter, except as required by the conditions of his
employment hereunder, any Confidential Information of the Company. This
provision shall not apply after the Confidential Information has been
voluntarily disclosed to the public by a duly authorized representative of the
Company, independently developed and disclosed by others, or otherwise enters
the public domain through lawful means.
IX. Removal Of Documents Or Objects.
The Executive agrees not to remove from the premises of the Company, except
as an officer, director or employee of the Company in pursuit of the business of
the Company or any Affiliates of the Company, or except as specifically
permitted in writing by the Company, any document or object containing or
reflecting any Confidential Information of the Company. The Executive recognizes
that all documents or material containing Confidential Information developed by
him or by someone else in the course of employment by the Company, are the
exclusive property of the Company.
X. Nonpiracy Covenants.
(A) For the purpose of this Agreement, the following terms shall have the
following meanings:
(1) "OPS Customers" shall be limited to those customers of the Company or
Affiliates of the Company for whom the Company or Affiliates of the Company are
rendering services as of the date of termination of the Executive's employment;
(2) "Affiliates of the Company" shall have the meaning ascribed to such
term in Rule 12b-2 under the Exchange Act as in effect on the date of this
Agreement;
(3) "Prohibited Services" shall mean services in the new and remanufactured
office furniture industry performed by the Company or Affiliates of the Company,
their agents or employees in any other business engaged in by the Company or
Affiliates of the Company on the date of termination of the Executive's
employment;
(4) "Prospective Customers" shall be limited to those parties known by the
Executive to have been solicited for business within any Prohibited Services
within the twelve (12)-month period preceding the date of termination of the
Executive's employment, and with or from whom, within the twelve (12)-month
period preceding the date of termination of the Executive's employment, someone
acting on behalf of the Company or Affiliates of the Company either had met for
the purpose of offering any Prohibited Services or had received a written
response to an earlier solicitation to provide any Prohibited Services;
(5) "Restricted Period" shall mean the period of five (5) years immediately
following the date of termination of the Executive's employment.
(B) The Executive recognizes that over a period of years the Company has
developed, at considerable expense, relationships with, and knowledge about,
Customers and Prospective Customers which constitute a major part of the value
of the Company. During the course of his employment by the Company, the
Executive will either have substantial contact with, or obtain substantial
knowledge about, these Customers and Prospective Customers. In order to protect
the value of the Company's business, the Executive covenants and agrees that, in
the event of the termination of his employment, but only if said termination is
voluntary or for Proper Cause, he shall not, directly or indirectly, for his own
account or for the account of any other person or entity, as an owner,
stockholder, director, employee, partner, agent, broker, consultant or other
participant during the Restricted Period:
(1) solicit a Customer for the purpose of providing Prohibited Services to
such Customer;
(2) accept an invitation from a Customer for the purpose of providing
Prohibited Services to such Customer;
(3) solicit a Prospective Customer for the purpose of providing Prohibited
Services to such Prospective Customer; and
(4) accept an invitation from a Prospective Customer for the purpose of
providing Prohibited Services to such Prospective Customer.
Subsections (1), (2), (3), and (4) are separate and divisible covenants; if
for any reason any one covenant is held to be illegal, invalid or unenforceable,
in whole or in part, the remaining covenants shall remain valid and enforceable
and shall not be affected thereby. Further, the periods and scope of the
restrictions set forth in any such subsection shall be reduced by the minimum
amount necessary to reform such subsection to the maximum level of enforcement
permitted to the Company by the law governing this Agreement. Additionally, the
Executive agrees that no separate geographic limitation is needed for the
foregoing nonpiracy covenants as such are not a prohibition on the Executive's
employment in the new and remanufactured office furniture industry and are
already limited to only those entities which are included within the definition
of "Customer" and "Prospective Customer."
XI. Nonraiding of Employees.
(A) Executive covenants that during the term of this Agreement, he will not
solicit, induce or encourage for the purposes of employing or offering
employment to, or directly or indirectly solicit, induce or encourage to seek
employment with any other business, whether or not Executive is then affiliated
with such business, any individual who is then an employee of OPS or its
Affiliates, including Xxxx X. Xxxxx ("Xxxxx");
(B) Executive covenants that, during the Restricted Period specified in
Section X(A) hereof, but only if said termination is voluntary or for Proper
Cause, he will not solicit, induce or encourage for the purposes of employing or
offering employment to, or directly or indirectly solicit, induce or encourage
to seek employment with any other business, whether or not Executive is then
affiliated with such business, any individual who, as of the date of termination
of Executive's employment hereunder, is an employee of OPS or its Affiliates,
other than Xxxxx;
(C) Executive covenants that, if prior to the expiration or termination of
this Agreement, (i) OPS terminates Executive for Proper Cause (as defined in his
Employment Agreement) or (ii) Executive voluntarily resigns as an employee of
OPS, Executive will not initiate the solicitation or inducement for the purposes
of employing or offering employment to, or directly or indirectly initiate the
solicitation or inducement to seek employment with any other business, whether
or not Executive is then affiliated with such business, of Xxxxx, until the
later of (x) the expiration or termination of this Agreement or (y) six (6)
months after such termination for Proper Cause or voluntary resignation of
Xxxxx.
XII. Notification of Former and New Employment.
During the term of this Agreement and the Restricted Period specified in
Section X. hereof, but only if the termination of employment by the Executive is
voluntary or for Proper Cause, the Executive covenants to notify any prospective
employer or joint venturer, which is a competitor of the Company of this
Agreement with the Company; and if the Executive accepts employment or
establishes a relationship with such competitor, the Executive covenants to
notify the Company immediately of such relationship. If the Company reasonably
believes that the Executive is affiliated or employed by or with a competitor of
the Company during the Restricted Period, after termination of his employment
voluntarily or for Proper Cause, then the Executive grants the Company the right
to forward a copy of this Agreement to such competitor.
XIII. Remedies Upon Employee Breach of Agreement.
If the Executive materially breaches any provision of this Agreement and
fails to cure any such material breach within five (5) days after written notice
of said material breach is received from the Company, the Company reserves the
right to avail itself of any reasonable remedy available to it at law or in
equity. Further, if the Executive fails to cure any such material breach after
five (5) days from receipt of written notice of the material breach, the Company
may, at its sole option, employ reasonable disciplinary procedures against the
Executive for any material breach, up to and including discharge. The Executive
acknowledges and agrees that the Company shall be entitled to injunctive relief
against the Executive for any material violation by the Executive of Sections
VIII. IX., X., XI., or XII. of this Agreement which the Executive fails to cure
within five (5) days after receipt of written notice from the Company. The
Executive agrees that the foregoing remedies shall be cumulative and not
exclusive, shall not be waived by any partial exercise or nonexercise thereof
and shall be in addition to any other remedies available to the Company at law
or in equity.
XIV. Tolling of Restrictive Covenants During Violation.
If a material breach by the Executive of any of the restrictive covenants
of this Agreement occurs, the Executive agrees that the restrictive period of
each such covenant so materially violated shall be extended by a period of time
equal to the period of such material violation by the Executive. It is the
intent of this Section that the running of the restricted period of a
restrictive covenant shall be tolled during any period of material violation of
such covenant so that the Company shall get the full and reasonable protection
for which it contracted and so that the Executive may not profit by his material
breach.
XV. Notices.
All notices and other communications which are required or may be given
under this Agreement shall be in writing and shall be deemed to have been given
if delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid:
(A) If to the Company, to it at the following address:
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx X
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attn: Chairman of the Board
with a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Xx., Esquire
(B) If to the Executive, to him at the following address:
Xxxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
or to such other place as either party shall have specified by notice in
writing to the other. A copy of any notice or other communication given under
this Agreement shall also be sent to the Secretary and the Treasurer of the
Company addressed to such officers at the then principal office of the Company.
XVI. Governmental Regulation.
Nothing contained in this Agreement shall be construed so as to require
commission of any act contrary to law and whenever there is any conflict between
any provision of this Agreement and any statute, law, ordinance, order or
regulation, the latter shall prevail, but in such event any such provision of
this Agreement shall be curtailed and limited only to the extent necessary to
bring it within the legal requirements.
XVII. Arbitration.
Any dispute or controversy as to the interpretation, construction,
application or enforcement of, or otherwise arising under or in connection with
this Agreement, shall be submitted at the request of either party hereto for
mandatory, final and binding arbitration in the City of Richmond, Virginia, in
accordance with the applicable arbitration rules then prevailing of the American
Arbitration Association. The Company and Executive waive the right to submit any
controversy or dispute to a Court and/or a jury. Any award rendered therein
shall provide the full remedies available to the parties under the applicable
law and shall be final and binding on each of the parties hereto and their
heirs, executors, administrators, successors and assigns and judgment may be
entered thereon in any court having jurisdiction.
XVIII. Indemnification by the Company.
The Company shall defend, indemnify and hold harmless the Executive against
any all claims, causes of actions, damages and expenses (including all legal
fees and expenses) in any threatened, pending or completed action, arising out
of or relating in any way to action or conduct by the Executive by reason of the
fact that he was a representative of the Company or was serving at the request
of the Company or acts or conduct within the course of his employment pursuant
to this Agreement or in his capacity as a director of the Company. If the
Company contends that any action or conduct by the Executive was not within the
course of his employment or is otherwise not subject to this provision, the
Company shall pay to the Executive all defense costs and expenses to defend such
an action and shall only be entitled to reimbursement of such fees and expenses
if after a final adjudication, including all available appeals, there is a
holding that the Executive was not entitled to the defense and indemnification
under this provision.
XIX. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia without reference to principles of
conflicts of laws.
XX. Divisibility.
Should an arbitrator declare any provision of this Agreement to be invalid,
such declaration shall not affect the validity of the remaining portion of any
such provision or the validity of any other term or provision of the Agreement
as a whole or any part thereof, other than the specific portion declared to be
invalid.
XXI. Headings.
The headings to the Sections and Paragraphs of this Agreement are for
convenience of reference only and in case of any conflict the text of this
Agreement, rather than the headings, shall control.
XXII. Successors and Assigns.
This Agreement is binding upon and shall inure to the benefit of the
successors and assigns of the Company and the heirs, executors and legal
representatives of the Executive.
XXIII. Entire Agreement.
This Agreement contains the entire understanding of the parties with
respect to the subject matter contained herein and supersedes all prior
agreements, arrangements and understandings relating to the subject matter and
may only be amended by a written agreement signed by the parties hereto or their
duly authorized representatives.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WITNESS:
_______________________________ /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
ATTEST: OPEN PLAN SYSTEMS, INC.
________________________________ By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chairman of the Board
