Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, having an "Effective Date" of November 5, 2002,
is by and between School Specialty, Inc. ("SSI"), a Wisconsin Corporation (the
"Company") and Xxxxxxx X. Xxxxxxxxxxxx ("Employee").
RECITALS
The Company desires to employ Employee and to have the benefit of his
skills and services, and Employee desires to accept employment with the Company,
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. Employment and Duties. The Company hereby agrees to employ the Employee and
the Employee hereby accepts employment as the President of the Specialty
Companies and agrees to devote his full business time and efforts to the
diligent and faithful performance of his duties hereunder under the
direction of the CEO of the Company.
2. Term of Employment. Unless sooner terminated as hereinafter provided, the
term of the Employee's employment hereunder shall commence with and only
with the Effective Date of this agreement and shall continue until November
3, 2004, (the "term"). This Agreement may be terminated prior to the end of
the Term in the manner provided herein. In the event that this agreement is
not terminated pursuant to the terms of this Agreement, following the
initial term as described above, said agreement shall extend for successive
renewal terms of one (1) year each measured from the date of renewal,
unless either party shall notify the other party of their desire to not
renew the term of this agreement, with said notice to be made no later than
ninety (90) days prior to the expiration of the initial term of this
agreement or any then effective renewal term thereof.
3. Compensation. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) Base Salary. Effective on the date hereof, the annual base salary
payable to the Employee shall be Two Hundred Twenty-Five Thousand
dollars ($225,000.00) per year or such greater amount as determined
from time to time by the CEO of the Company (but not reviewed less
frequently than on an annual basis), payable on a regular basis in
accordance with the Company's standard payroll procedures, but not
less than monthly. It is understood that the base salary is a minimum
amount, and shall not be reduced during the term of this Agreement.
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(b) Special Payment. The Company also agrees to a one time special payment
of $60,500 on the first payroll check in May 2003
(c) Incentive Bonus. Employee shall be eligible to receive an incentive
bonus based upon his participation in the Company's Corporate Plan I
Bonus Program. Employee shall receive a minimum bonus of $75,000 for
the Fiscal year 2003.
(d) Perquisites, Benefits, and Other Compensation. During the initial term
and any extensions thereof, Employee shall be entitled to receive all
perquisites and benefits as are customarily provided by the Company to
its executive employees, subject to such changes, additions, or
deletions as the Company may make generally from time to time, as well
as such other perquisites or benefits as may be specified from time to
time by the Board of Directors or the Chief Executive Officer of the
Company. The employee shall be entitled to four weeks of vacation each
calendar year starting in 2003.
(e) Stock Options. The Employee shall be granted a combination of options
granted under the School Specialty Inc. Stock Incentive Plan Incentive
Stock Option Agreement ("ISO") (as defined and qualified under 422 of
the internal Revenue Code of 1986, as amended (the: Code)) and School
Specialty Inc., Stock Incentive Plan Nonqualified Stock Option
Agreement ("NSO") in a total amount 75,000 shares of common stock of
the Company (the "Option Shares"). The Option Shares shall be composed
of the maximum amount of shares permitted to be issued under the terms
of the ISO with the balance to be issued under the terms of the NSO.
The strike price of these options shall be the closing price of common
stock of the Company on the date the board approves said options.
This section is dependent on Board approval.
4. Covenants and Conditions.
(a) Confidentiality Obligations. During the term of Employee's employment,
Employee will not directly or indirectly use or disclose any Company
Confidential Information or Trade Secret except in the interest and
for the benefit of the Company. After the termination of Employee's
employment with the company, Employee will not directly or indirectly
use or disclose any Trade Secret Information unless such information
ceases to be deemed a Trade Secret Information. For a period of 24
months following termination of Employee's employment with the
Company, Employee will not directly or indirectly use or disclose any
company Confidential Information, unless such information ceases to be
deemed Confidential Information.
(b) Restriction on Competition.
1) During Employment - During the term of his/her employment with
the Company, Employee shall not directly or indirectly compete
against the
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Company, or divert or attempt to divert Customers' business from
the Company.
2) Following Employment - For 24 months following termination of
his/her employment with the Company, Employee agrees not to
directly or indirectly solicit or attempt to solicit any business
from any Restricted Customer which, in any manner, competes with
the services or products offered by the Company, or to divert or
attempt to divert any restricted Customer's business from the
Company.
(c) Confidential Information. The term "Confidential Information" shall
mean all non-Trade Secret or proprietary information including but not
limited to new products, customer lists, pricing policies, employment
records and policies, operational methods, marketing plans and
strategies, product development techniques and plans, business
acquisition plans, methods of manufacture, technical processes,
designs inventions, research programs and results, and source code.
(d) Exclusions. Notwithstanding the foregoing, the terms "Trade Secret
Information," "Trade Secrets", and "Confidential Information" shall
not include, and the obligations set forth in this Agreement shall not
apply to, any information which: (i) can be demonstrated by Employee
to have been known by him/her prior to his/her employment by the
Company; (ii) is or becomes generally available to the public through
no act or omission of Employee; (iii) is obtained by employee in good
faith from a third party who discloses such information to Employee on
a non-confidential basis without violating any obligation of
confidentiality or secrecy relating to the information disclosed; or
(iv) is independently developed by Employee outside the scope of
his/her employment without use of Confidential Information or Trade
Secrets.
(e) Customer. The term "Customer" shall mean any individual or entity for
whom the Company has provided services or made a proposal to perform
services.
(f) Restricted Customer. "Restricted Customer" shall mean any individual
or entity for whom/which the company provided services and with
whom/which the Employee has contacted on behalf of the company during
the 18 months preceding termination of Employee's employment.
(g) Cause. The term "Cause" means any act of dishonest, insubordination,
violation of Company policy or conviction of a crime, the
circumstances of which substantially relate to the employee's job.
(h) Return of Records. Upon termination of employment, or upon request by
the Company, Employee shall immediately return to the Company all
documents, records and materials belonging to and/or relating to the
Company (except personnel, wage and benefit materials relating solely
to Employee), and copies of all such materials.
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(i) Non-Solicitation of Employees. During the term of Employee's
employment with the Company and for two years thereafter, employee
shall not directly or indirectly encourage any company employee to
terminate his/her employment with the Company or solicit such an
individual for employment outside the Company.
(j) Employee Disclosures and Acknowledgements.
(a) Prior Obligations. All prior obligations (written and oral), such
as confidentiality agreements or covenants restricting future
employment or consulting, that Employee has entered into which
restrict Employee's ability to perform the duties as an Employee
for the Company are given to the Company.
(b) Confidential Information of Others. Employee certifies that
Employee has not, and will not, disclose or use during employee's
time as an Employee to the Company, any confidential information
which Employee acquired as a result of any previous employment or
under a contractual obligation of confidentiality or secrecy
before Employee became an employee of the Company.
(c) Scope of Restrictions. By entering into this Agreement, Employee
acknowledges the nature of the Company's business and the nature
and scope of the restrictions set forth in this Agreement.
Employee acknowledges and represents that the scope of the
restrictions are appropriate, necessary and reasonable for the
protection of the Company's business, goodwill, and property
rights. Employee further acknowledges that the restrictions
imposed will not prevent him/her from earning a living in the
event of, and after, termination of his/her employment with the
company.
(d) Prospective Employers. Employee agrees, during the term of any
restriction contained in this Agreement, to disclose this
Agreement to any future prospective employer. Employee further
agrees that the Company may send a copy of this Agreement to, or
otherwise make the provisions hereof known to, any such employer.
(k) Entire Agreement; Amendment or Waiver. This Agreement contains the
entire understanding between the parties with respect to the subject
matter hereof and therein and all prior discussions, negotiations,
agreements, correspondence and understandings, whether oral or
written, between Employee and the Company with respect to the subject
matter hereof are merged herein and superseded hereby. No provision of
this Agreement may be amended or waived other than in writing by the
party against whom enforcement of such amendment or waiver is sought.
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(l) Injunctive Relief. The parties agree that damages will be an
inadequate remedy for breaches of this agreement and in addition to
damages and any other available relief, a court shall be empowered to
grant injunctive relief.
(m) Headings. The headings of sections and paragraphs of this Agreement
are for convenience of reference only and shall not control or affect
the meaning or construction of any of its provisions.
(n) Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive and procedural laws of the State in
which the Employee regularly and primarily performs his/her work for
the Company.
(o) Severability. The obligations imposed by this Agreement are severable
and should be construed independently of each other. The invalidity of
one provision shall not affect the validity of any other provision.
Nothing in this provision shall contemplate any blue penciling.
(p) Terminable-At-Will. Nothing in this Agreement shall modify the right
of either party to terminate the employment relationship with or
without cause.
5. Death or Disability of the Employee. The Employee's employment shall
terminate immediately upon his death. In the event the Employee becomes
physically or mentally disabled so as to become unable, for a period of
more than one hundred twenty (120) consecutive working days or for more
than one hundred twenty (120) working days in the aggregate during any
twelve (12) month period, to perform his duties hereunder on a
substantially full-time basis, the Company may at its option terminate his
employment upon not less than thirty (30) days written notice. The
Company's right to terminate the Employee's employment pursuant to the
preceding sentence shall cease in the event the notice of termination
provided for therein shall not be given during the period of the Employee's
disability or within ninety (90) days after such disability ceases.
6. Termination. The Company reserves the right to terminate the Employee's
employment immediately under this agreement should any of the following
occur:
(a) With Cause. The Company has the right to terminate the Employee's
employment immediately under this agreement without obligation for any
wages beyond the date the notice of termination is provided should any
of the follow occur:
(i) The Employee's commission of a felony that is an act which in the
opinion of the Board of Directors is either abhorrent to the community
or is an intentional act which the Board of Directors considers
materially damaging to the reputation of the company or its successors
or assigns.
(ii) The Employee's breach of or failure to perform his obligations in
accordance with the terms and conditions of this agreement.
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(iii) Any act of dishonesty or insubordination by the Employee
(iv) The Employee's violation of any Company policy including but not
limited to the Company's policy against unlawful harassment.
(b) Without Cause. During the term of this Agreement should the Employee's
employment with the Company be terminated without cause the Company
shall pay to the Employee the Base Salary described in Section 3(a)
for a period of twelve (12) months. Termination as described in
sections 5 and 6 (a) of this agreement; or should employee resign or
terminate his/her employment for any reason or for no reason, said
employee shall receive no severance or salary beyond the employee's
last day of employment.
7. Successors and Assigns. Rights and duties under this Agreement shall be and
are binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns,
although this Agreement, and the right of the Employee to act as an
Employee of the Company, is purely personal and not transferable.
8. Representations of the Employee. The Employee warrants and represents to
the Company that as of the Effective Date, he/she is not subject to any
employment, consulting or services agreement, or any restrictive covenants
or agreements of any type which would conflict or prohibit the Employee
from fully carrying out their duties as described under the terms of this
agreement. Further the Employee warrants and represents to the Company that
he/she has not and will not retain or use, for the benefit of the Company,
any confidential information, records, trade secrets, or other property of
a former employer. These warranties and representations shall remain in
full force and effect beyond the term of the employment of the Employee
with the Company.
9. Notice. All notices, demands and other communications hereunder shall be
deemed to have been duly given, if delivered by hand or mailed, certified
or registered mail with postage prepaid:
To the Company: School Specialty, Inc.
X0000 Xxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx XX 00000-0000
Attention: Xx. Xxxxx Xxxxxx Zanden
Fax: 0-000-000-0000
With a copy to: Xxxxxx X. Xxxxxxx XX, Esq.
Xxxxxxx & Xxxxxxx, S.C.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
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To Employee: Xxxxxx Xxxxxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Or to such other address as the person to whom notice is to be given may
have specified in a notice duly given to the sender as provided herein.
Such notice, request, claim, demand, waiver, consent, approval or other
communication shall be deemed to have been given as of the date so
delivered, telefaxed, mailed or dispatched and, if given by any other
means, shall be deemed given only when actually received by the addressees.
10. Expenses. Each party hereto shall bear and pay all of their respective
fees, expenses and disbursements of their agents, representatives,
accountants and counsel incurred in connection with the subject matter of
this Agreement, and its enforcement.
11. Severability. If any provision of this Agreement or the application thereof
to any person or circumstances is held invalid or unenforceable in any
jurisdiction, the remainder hereof, and the application of such provision
to such person or circumstances in any other jurisdiction, shall not be
affected thereby, and to this end the provisions of this Agreement shall be
severable.
12. Governing Law. This Agreement shall in all respects be construed according
to the laws of the State of Wisconsin, without regard to its conflict of
laws principles.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
COMPANY: School Specialty, Inc.
/s/ Xxxx Xxxxxx Zanden
------------------------------
Xxxx Xxxxxx Zanden,
President & CEO
EMPLOYEE:
/s/ Xxxxxxx Xxxxxxxxxxxx
------------------------------
Xxxxxxx Xxxxxxxxxxxx
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