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EXHIBIT 10.29
FORM OF
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
this day of __________, 1998, but effective as of _________, 1997 ("Effective
Date") by and between OFFICE CENTRE CORPORATION, a corporation with offices
located at New York, New York (the "Company") and XXXXXX X. XXXXX ("Executive")
of THE SUPPLY ROOM COMPANIES, INC., a subsidiary of the Company ("TSRC").
RECITALS:
WHEREAS, Executive was previously employed as President and together
with related persons was the primary stockholder of TSRC; and
WHEREAS, a subsidiary of the Company has acquired, through merger, the
entire business and assets of TSRC, which business shall be conducted as an
integral subsidiary of the Company; and
WHEREAS, Executive was a key executive in TSRC with expertise in the
sales of TSRC products and knowledge of the operation of the business including,
but not limited to, sales and customer relation makers; and
WHEREAS, the Company desires to assure continuance of Executive's
service in connection with such business; and
WHEREAS, the parties agree that a covenant not to compete is essential
to the growth and stability of the business of TSRC as a subsidiary of the
Company for a period of time after its acquisition by the Company and to the
continuing viability of such business whenever the employment to which this
Agreement relates is terminated.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth and the purchase price for TSRC, the parties agree as follows:
1. DUTIES. Upon the Effective Date, the Company shall employ and the
Executive agrees to be employed as President of TSRC, a subsidiary of the
Company, and as such to supervise and direct the entire operation of such
subsidiary and perform such different or other duties related to the business as
may from time to time be delegated by the Company. In addition, the Executive
will be responsible for identifying acquisition opportunities for the Company in
the office furniture industry, and will have the authority to negotiate and
enter into investment or acquisition agreements for consideration up to
$2,000,000 with each such company or companies, subject to the approval of the
president of the Company, such approval not to be unreasonably withheld. The
Executive shall devote substantially all of his time to such duties, except for
reasonable vacation periods, and shall observe and abide by the reasonable
corporate policies and decisions of the Company in all business matters and
shall be
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responsible to the Chief Executive Officer Company. The Executive shall perform
his duties from offices located in Richmond, Virginia.
2. TERM. The Executive's employment hereunder shall continue for a
period of three (3) years, beginning on the Effective Date of this Agreement
unless earlier terminated pursuant to the terms of this Agreement.
3. COMPENSATION. The Company shall pay and the Executive shall accept
as full consideration for the services to be rendered hereunder compensation
consisting of the following:
(a) An annual base salary of One Hundred Fifty Thousand
Dollars ($150,000) which may be increased by the Board of Directors of the
Company during the term of this Agreement and which shall be paid by the Company
in semi-monthly installments starting __________ ,19_;
(b) An annual bonus ranging from 0-100% of base salary
dependent on achievement of profitability objectives for the Executive's
division according to the following schedule:
Achievement Cash Bonus
----------- ----------
130% of profitability objective 100% of annual salary
115% of profitability objective 40% of annual salary
100% of profitability objective 25% of annual salary
Less than 100% of profitability objective No bonus awarded
(c) Transferable (subject to federal and state securities law
restrictions) stock options for 50,000 shares, exercisable at the initial public
offering price of the Company, for a period of ten (10) years from the date of
grant, which vest ratably over a three (3) year period. The number of stock
options granted, but not the exercise price, shall be subject to adjustments for
any stock splits, stock dividends, combinations or subdivisions. Other stock
options may be granted yearly in the discretion of the Company's Compensation
Committee and approved by the Board of Directors of the Company;
(d) A Satellite Acquisition Bonus for actively assisting the
Company in acquiring other target companies identified by Executive and the
Company (including, but not limited to, conducting research, performing due
diligence, reviews of the acquirees and contributing to negotiating in
connection with any such acquisition) as follows:
.5% of the annualized sales in the twelve months preceding the
closing date of the Satellite Acquisition.
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(e) An automobile allowance of $600 per month for use at the
Executive's discretion to cover automobile expenses, including but not limited
to the following: automobile purchase or lease payments; gas, oil and
lubrication; insurance and routine maintenance; tire purchases; major repairs;
and traffic violations.
(f) Payment of 100% of medical insurance premiums for
Executive and Executive's spouse and family.
(g) Continuation of the $500,000 split-dollar life insurance
policy selected by the Company with Executive's designated beneficiary; month;
(h) A disability insurance policy with a total benefit of
$ ________ per month;
(i) Such other benefits as may be made available from time to
time to other management employees of the Company with similar years of service
as Executive;
(j) A minimum of three (3) weeks paid vacation each year;
(k) At Executive's option, attendance at such trips, meetings,
conferences or other activities offered by vendors of the Company or TSRC,
provided, however, that such activities do not interfere with Executive's duties
herewith; and
(I) Such other items as may be agreed upon by Executive and
the Company from time to time, including but not limited to, expense accounts.
4. ILLNESS, INCAPACITY OR DEATH.
(a) If at any time during the term of this Agreement, the
Executive becomes Disabled (as defined herein) and he has not breached any of
the provisions of this Agreement, compensation shall continue to be paid to him
as provided in Paragraph 3 above but only as to the first 90-day period during
which he shall be so disabled. The Company may, at its sole option, continue
payment of Executive's salary until he is able to return to work or for such
period greater than 90 days as the Company elects, or may terminate this
Agreement. For purposes of this section "Disabled" shall mean, with respect to
Executive, the inability of Executive, by reason of injury, illness or other
similar cause (as determined by a licensed physician, selected by the Executive
or his representative and approved by the President of the Company), to have
performed his duties and responsibilities for a period of one hundred eighty
(180) consecutive days.
(b) If Executive should die during the term of this Agreement,
Executive's employment and the Company's obligations hereunder shall terminate
as of the end of the month in which his death occurs.
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5. COVENANT NOT TO COMPETE AND NON-DISCLOSURE OF INFORMATION.
(a) COVENANT NOT TO COMPETE. The Executive acknowledges and
recognizes the highly competitive nature of the Company's business and the
goodwill, continued patronage, and specifically the names and addresses of the
Company's Clients (as hereinafter defined) constitute a substantial asset of the
Company having been acquired through considerable time, money and effort.
Accordingly, in consideration of the execution of this Agreement, the Executive
agrees to the following:
(i) Subject to Section 7 of this Agreement, that during the
Restricted Period (as hereinafter defined) and within the
Restricted Area (as hereinafter defined), the Executive will
not, individually or in conjunction with others, directly or
indirectly, engage in any Business Activities (as hereinafter
defined), whether as an officer, director, proprietor,
employer, partner, independent contractor, investor (other
than as a holder solely as an investment of less than one
percent (1%) of the outstanding capital stock of a publicly
traded corporation), consultant, advisor, agent or otherwise.
(ii) That during the Restricted Period and within the
Restricted Area, the Executive will not, directly or
indirectly, compete with the Company by soliciting, inducing
or influencing any of the Company's clients which have a
business relationship with the Company at the time during the
Restricted Period to discontinue or reduce the extent of such
relationship with the Company.
(iii) That during the Restricted Period and within the
Restricted Area, the Executive will not (A) directly or
indirectly recruit, solicit or otherwise influence any
employee or agent of the Company to discontinue such
employment or agency relationship with the Company, or (B)
employ or seek to employ, or cause or permit any business
which competes directly or indirectly with the Business
Activities of the Company (the "Competitive Business") to
employ or seek to employ for any Competitive Business any
person who is then (or was at any time within six (6) months
prior to the date Executive or the Competitive Business
employs or seeks to employ such person) employed by the
Company.
(v) That during the Restricted Period the Executive will not
interfere with, or disrupt or attempt to disrupt any past,
present or prospective relationship, contractual or otherwise,
between the Company and any customer, employee or agent of the
Company.
(b) NON-DISCLOSURE OF INFORMATION. The Executive acknowledges
that the Company's trade secrets, private or secret processes, methods and
ideas, as they exist
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from time to time, customer lists and information concerning the Company's
products, services, training methods, development, technical information,
marketing activities and procedures, credit and financial data concerning the
Company and/or the Company's Clients (the "Proprietary information") are
valuable, special and unique assets of the Company, access to and knowledge of
which are essential to the performance of the Executive hereunder. In light of
the highly competitive nature of the industry in which the Company's business is
conducted, the Executive agrees that all Proprietary Information, heretofore or
in the future obtained by the Executive as a result of the Executive's
association with the Company shall be considered confidential.
In recognition of this fact, the Executive agrees that the
Executive, during the Restricted Period, will not use or disclose any of such
Proprietary Information for the Executive's own purposes or for the benefit of
any person or other entity or organization (except the Company) under any
circumstances unless such Proprietary Information has been publicly disclosed
generally or, unless upon written advice of legal counsel reasonably
satisfactory to the Company, the Executive is legally required to disclose such
Proprietary Information. Documents (as hereinafter defined) prepared by the
Executive or that come into the Executive's possession during the Executive's
association with the Company are and remain the property of the Company, and
when this Agreement terminates, such Documents shall be returned to the Company
at the Company's principal place of business, as provided in the Notice
provision (Section 9) of this Agreement.
(c) DOCUMENTS. "Documents" shall mean all original written,
recorded, or graphic makers whatsoever, and any and all copies thereof,
including, but not limited to: papers; books; records; tangible things;
correspondence; communications; telex messages; memoranda; work-papers; reports;
affidavits; statements; summaries; analyses; evaluations; client records and
information; agreements; agendas; advertisements; instructions; charges;
manuals; brochures; publications; directories; industry lists; schedules; price
lists; client lists; statistical records; training manuals; computer printouts;
books of account, records and invoices reflecting business operations; all
things similar to any of the foregoing however denominated. In all cases where
originals are not available, the term "Documents" shall also mean identical
copies of original documents or non-identical copies thereof.
(d) COMPANY'S CLIENTS. The "Company's Clients" shall be deemed
to be any persons, partnerships, corporations, professional associations or
other organizations for whom the Company has performed Business Activities.
(e) RESTRICTIVE PERIOD. The "Restrictive Period" shall be
deemed to be during the term of Executive's employment with the Company and two
(2) years following termination of the Executive's employment with the Company.
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(f) RESTRICTED AREA. The Restricted Area shall be deemed to
mean any state in which Company does business and within any other county of any
state in which the Company is providing service at the time of termination.
(g) BUSINESS ACTIVITIES. "Business Activities" shall be deemed
to include any business activities concerning selling, distributing,
manufacturing or marketing of office supply products or office furniture or
office related products provided by the Company and any additional activities
which the Company or any of its affiliates may engage in during the term of this
Agreement.
(h) COVENANTS AS ESSENTIAL ELEMENTS OF THIS AGREEMENT. It is
understood by and between the parties hereto that the foregoing covenants
contained in Paragraphs 5(a) and 5(b) are essential elements of this Agreement,
and that but for the agreement by the Executive to comply with such covenants,
the Company would not have agreed to enter into this Agreement. Such covenants
by the Executive shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of such covenants against the Executive.
6. COVENANTS TO SURVIVE THIS AGREEMENT. The covenants of Executive
contained in Paragraphs 5(a) and 5(b) hereof shall each be construed as an
agreement independent of any other provision in this Agreement and shall survive
the expiration or termination of this Agreement or any part thereof without
regard to the reason therefor. The existence of any claim or cause of action of
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
either covenant. Both parties hereby expressly agree and contract that it is not
the intention of either party to violate any public policy, statutory or common
law, and that if any sentence, paragraph, clause, or combination of the same of
Paragraphs 5(a) or 5(b) (including the provisions incorporated by reference) is
in violation of the law of any state where applicable, such sentence, paragraph,
clause, or combination of the same shall be void in the jurisdictions where it
is unlawful, and the remainder of such paragraph and this Agreement shall remain
binding on the parties hereto. It is the intention of both parties to make the
covenants of Paragraphs 5(a) and 5(b) binding only to the extent that it may be
lawfully done under existing applicable laws. In the event that any part of any
covenant of Paragraphs 5(a) or 5(b) is determined by a court of law to be overly
broad thereby making the covenant unenforceable, the parties hereto agree, and
it is their desire, that such court shall substitute a reasonable, judicially
enforceable limitation in place of the offensive part of the covenant and as so
modified the covenant shall be as fully enforceable as set forth herein by the
parties themselves in the modified form.
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7. AFFILIATION WITH MEGA FURNITURE. L.L.C. Notwithstanding Paragraph
5(a) above, Executive shall have the authority to act as Chairman of the Board
and Chief Executive Officer of Mega Office Furniture, L.L.C. ("Mega") and to
continue to engage in the sale, distribution, manufacture and marketing of
office furniture on behalf of Mega.
8. TERMINATION OF EMPLOYMENT.
(a) BY THE COMPANY. The Company may terminate the employment
of the Executive for Cause (as defined herein) and notice of such termination
shall be sent to Executive. "Cause" shall mean the Executive's (i) willful
misconduct, (ii) grossly negligent misconduct in the performance of his duties
to the Company, (iii) material breach of his obligations under this Agreement,
(iv) failure to comply with the lawful instructions of the Board of Directors or
(v) conviction of, or plea of nolo contendere to a crime involving moral
turpitude under federal, state or local laws. Notwithstanding the foregoing, a
crime involving tax makers shall not be considered a crime involving moral
turpitude.
(b) BY THE EXECUTIVE. Subject to the Company's rights pursuant
to Section 8(a)(i), (ii) and (v), at any time prior to the expiration of the six
(6) month period following the date hereof, the Executive may terminate the
Executive's employment under this Agreement for Good Reason (as hereafter
defined) by giving not less than thirty (30) days written notice to the Company
setting forth the grounds stating there is "Good Reason." In such event,
(i) The Executive shall be paid for the remainder of the then
current term of this Agreement, at such times as payment was
theretofore made, the salary required under Section 3 that the
Executive would have been entitled to receive during the
remainder of the then current term of this Agreement had such
termination not occurred; and
(ii) The Company shall maintain in full force and effect for
the continued benefit of the Executive for the remainder of
the then current term of this Agreement, all employee benefit
plans and programs or arrangements in which the Executive was
entitled to participate immediately prior to such termination,
provided that continued participation is possible under the
general terms and provisions of such plans and programs. In
the event that Executive's participation in any such plan or
program is barred, the Corporation shall arrange to provide
the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans
and programs;
(iii) All options received by Executive pursuant to Paragraph
3(i) hereof shall immediately vest and shall be exercisable in
accordance with the terms thereof; and
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(iv) The Executive shall receive the sum of Three Million
Dollars ($3,000,000) as satisfaction of the earnout
obligations set forth in the Amended and Restated Merger
Agreement dated as of April 29, 1998 between the Company and
TSRC.
For purposes of this Agreement, "Good Reason" shall mean:
(i) The assignment of duties to the Executive by the
Corporation which are materially different from the
Executive's duties on the date hereof, any diminution of
responsibility or other actions taken by the Company which
result in the Executive having significantly less authority
and/or responsibility than he had heretofore; or
(ii) The removal of the Executive from or any failure to
re-elect him to the position of President of TSRC.
It shall be within the Executive's sole and absolute
discretion and judgment whether Good Reason exists, and such determination shall
be conclusive absent bad faith.
9. WITHHOLDING. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or the Executive's
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Company may accept other arrangements
pursuant to which it is satisfied that such tax and other payroll obligations
will be satisfied in a manner complying with applicable law or regulation.
1O. MISCELLANEOUS.
(a) Governing law. The validity, construction, interpretation
and enforceability of this Agreement and the capacity of the parties shall be
determined and governed by the laws of the State of Virginia.
(b) Assignment. This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of the rights or
obligations hereunder without first obtaining a written consent of the other
party.
(c) Rights and Remedies. The parties hereto recognize that the
services to be rendered under this Agreement by Executive are special, unique,
and of extraordinary character. Either party may, at its option, terminate this
Agreement or elect to institute and prosecute proceedings in any court of
competent jurisdiction, either in law or equity, to obtain damages, to enforce
specific performance of the Agreement, to
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enjoin the other party as appropriate and to recover reasonable attorneys' and
costs of prosecuting such action in the event of the occurrence of any of the
following:
(1) if there is a substantial breach by either party
of any of the terms and conditions of this Agreement (other
than those set forth in paragraphs 5 and 6 herein), and such
breach remains uncured after the expiration of sixty (60) days
from the date of receipt of written notice by other party, or
(2) if there is a breach by Executive of any of the
covenants of paragraphs 5 and 6 of this Agreement.
(d) Collateral Agreements. This Agreement constitutes the
entire Agreement between the parties respecting the employment of Executive, and
there are no representations, warranties or commitments, except as set forth
herein. This Agreement may be amended only by an instrument in writing executed
by the parties hereto.
(e) Notices. Any notice, request, demand or other
communication hereunder shall be in writing and shall be deemed to be duly given
when personally delivered to an officer of the Company or to Executive, as the
case may be, or when delivered by mail at the following addresses:
If to the Company:
OFFICE CENTRE CORPORATION
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx., President
If to the Executive:
XXXXXX X. XXXXX
00000 Xxxxx Xxxx
Xxxxxxx, XX 00000
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first written above.
COMPANY:
OFFICE CENTRE CORPORATION
By:
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Xxxxxx X. Xxxxxx, Xx., President
EXECUTIVE:
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XXXXXX X. XXXXX
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