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 MicroAge, Inc., a Delaware corporation ("MicroAge"), and Xxxxx
X. Xxxxxx ("Executive").
RECITALS
WHEREAS, Executive is currently serving as the Executive Vice President,
Chief Financial Officer, and Treasurer of MicroAge;
WHEREFORE, the parties have agreed that it is in their respective best
interests to amicably resolve all matters relative to Executive's employment
with MicroAge and separation therefrom pursuant to the following terms and
conditions:
I.
MicroAge 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 Paragraphs 10-11
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 and/or director 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 Amended and Restated Employment Agreement, dated as of
November 4, 1996, by and between MicroAge and Executive (the "Employment
Agreement"). The parties agree that MicroAge 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 MicroAge 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
MicroAge 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,
MicroAge and any and all of its affiliates, subsidiaries, corporate parents,
agents, directors, 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 MicroAge 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. Notwithstanding the
foregoing, neither the Company nor Executive intends that Executive waive his
indemnification and other rights under Article IX of the Company's Amended and
Restated Certificate of Incorporation.
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 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;
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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 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 MicroAge 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 and the Non-Competition 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.
For a period of twelve (12) months following the Separation Date, Executive
agrees to assist MicroAge and make himself reasonably available to MicroAge in
connection with ongoing or new litigation or other proceedings to which MicroAge
or any of its affiliates is, or may become, a party and for which Executive may
have information or knowledge relevant to any such litigation or proceedings.
MicroAge agrees to promptly reimburse Executive for all reasonable travel and
other expenses incurred by Executive in performing his obligations under this
Article VI.
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VII.
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.
VIII.
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.
IX.
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 MicroAge 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!
------------------------------------------------
MICROAGE, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
-------------------------------------------------------
Its: Chairman of the Board and Chief Executive Officer
Date: February 24, 2000
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
----------------------------------------------------------
Date: February 24, 2000
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VERIFICATION
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 24th day of February, 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
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Severance Benefits
1. Section 4.2 Payments. MicroAge 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 189 hours
of unused accrued hours, or 23.625 days (the "Accrued Vacation Days"). MicroAge
will reimburse Executive for such unused accrued vacation days in an amount
equal to Executive's current annual base salary less his 1999 MEP waiver
($255,000) multiplied by a fraction, the numerator of which is the number of
unused accrued vacation days (23.625), and the denominator of which is 260. On
or promptly following the Separation Date, MicroAge will pay Executive
$23,170.65 for these accrued unused vacation days.
3. Reimbursable Expenses. MicroAge 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, MicroAge will cease
making contributions to the monthly premiums it made while Executive was an
active MicroAge 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
MicroAge Retirement Savings Plan (the "401(k) Plan") and the MicroAge 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 MicroAge entered into a
Split-Dollar Insurance Agreement, dated as of September 1, 1995 (the
"Split-Dollar Agreement"). MicroAge 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 MicroAge
an amount equal to MicroAge's security interest in the Policy ($106,273.77). If
Executive does not elect to retain the Policy, MicroAge's obligations under the
Split-Dollar Agreement will terminate and Executive will transfer the Policy to
MicroAge 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. MicroAge will not cause the Policy to be transferred to MicroAge
unless Executive has not paid MicroAge the security interest in the Policy by
March 16, 2000.
7. Disability Insurance. Executive currently has disability insurance
pursuant to separate policies: (1) the UNUM Disability Policy (the "UNUM
Policy") and (2) the Xxxx Xxxxxx Individual Disability Policy (the "Individual
Policy"). The UNUM Policy will terminate as of April 1, 2000. MicroAge will
cause the Individual Policy to remain in full force and effect until December
22, 2000. After December 22, 2000, Executive will be responsible for the full
premium payments if Executive wishes to continue coverage under the Individual
Policy. If Executive elects to continue coverage under the Individual Policy,
Executive should contact Xxxxx Xxxxxx-Xxxxxx (602-955-7370) on or before
December 1, 2000.
8. Stock Options (Non-MEP). During Executive's employment Executive was
granted the following stock options:
A. Pursuant to the 1994 Stock Option Plan Grant Letter, dated
as of December 13, 1995 (the "1994 Grant Letter"), Executive was
granted the option to purchase a total of 10,000 shares of Common Stock
at an exercise price of $8.75 per share. Pursuant to the terms of the
1994 Grant Letter, on or before the Separation Date, Executive is
entitled to purchase up to 8,000 shares of Common Stock at an exercise
price of $8.75 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 Long-Term Incentive Plan Incentive
Stock Option Award (the "1994 Incentive Award"), dated December 4, 1996
Executive was granted the option to purchase a total of 10,000 shares
of Common Stock at an exercise price of $24.00 per share. Pursuant to
the terms of the 1994 Incentive Award, on or before the Separation
Date, Executive is entitled to purchase up to 6,000 shares of Common
Stock
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at an exercise price of $24.00 per share. In accordance with the terms
of the 1994 Incentive Award, all options thereunder will terminate on
the Separation Date.
C. Pursuant to the 1997 Long-Term Incentive Stock Option
Award, dated April 2, 1998 (the "April 1998 Letter"), Executive was
granted the option to purchase a total of 10,000 shares of Common Stock
at an exercise price of $14.375 per share. Pursuant to the terms of the
April 1998 Letter, on or before the Separation Date, Executive is
entitled to purchase up to 2,000 shares of Common Stock at an exercise
price of $14.375 per share, subject to certain stock price hurdles. In
accordance with the terms of the April 1998 Letter, all options
thereunder will terminate on the Separation Date.
D. Pursuant to the 1997 Long-Term Incentive Stock Option
Award, dated September 24, 1998 (the "September 1998 Letter"),
Executive was granted the option to purchase 60,000 shares of Common
Stock at an exercise price of $13.25 per share. Pursuant to the terms
of the September 1998 Letter, on or before the Separation Date,
Executive is entitled to purchase up to 12,000 shares of Common Stock
at an exercise price of $13.25 per share. In accordance with the terms
of the September 1998 Letter, all options thereunder will terminate on
the Separation Date.
E. Pursuant to the 1997 Long-Term Incentive Stock Option
Award, dated January 28, 1999 (the "January 1999 Letter"), Executive
was granted the option to purchase a total of 10,000 shares of Common
Stock at an exercise price of $16.56 per share. Pursuant to the terms
of the January 1999 Letter, on or before the Separation Date, Executive
is entitled to purchase up to 2,000 shares of Common Stock at an
exercise price of $16.56 per share. In accordance with the terms of the
January 1999 Letter, all options thereunder will terminate on the
Separation Date.
F. Pursuant to the 1997 Long-Term Incentive Stock Option
Award, dated April 5, 1999 (the "April 1999 Letter"), 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,
Executive is not entitled to exercise any of the options under the
April 1999 Letter. In accordance with the terms of the April 1999
Letter, all options thereunder will terminate on the Separation Date.
9. Management Equity Programs.
A. Pursuant to the 1994 Management Equity Program Award
Agreement, dated December 9, 1993, as amended (the "1994 MEP
Agreement"), Executive received 104,698 options as a result of his
election to restructure his compensation package by reducing his
compensation. In accordance with the terms of the 1994 MEP Agreement,
as of the Separation Date, Executive has obtained 104,698 options under
the 1994 MEP Agreement by reducing his compensation. Following the
Separation Date, these options will continue to vest in accordance with
the terms of the 1994 MEP Agreement.
9
B. Pursuant to the 1999 Management Equity Program Award
Agreement, dated April 7, 1999 (the "1999 MEP Agreement"), Executive
had the right to receive up to 57,873 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 45,816
options under the 1994 MEP Agreement by reducing his compensation
($67,291.73 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 options that had vested as of the Separation Date, as described in Section
8, paragraphs A-E above, for twelve (12) months after the Separation Date.
11. Retention of Certain Equipment. Executive may retain the following
equipment he was using during his employment with MicroAge: (a) the desktop
computer located in Executive's office; (b) the desktop computer located in
Executive's home; (c) the laptop computer used by Executive; (d) the two (2)
cell phones used by Executive (one car phone and one mobile phone); and (e) the
Palm Pilot used by Executive. As of the Separation Date, MicroAge will transfer
the foregoing equipment and the related cellular phone accounts to Executive and
Executive will be responsible for maintaining such accounts.
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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 and/or director, as the case may
be, of MicroAge, Inc. and its subsidiaries and affiliates, including each of the
corporations attached hereto as Schedule 1, effective as of February 15, 2000.
Sincerely,
Xxxxx X. Xxxxxx
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Schedule 1
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COMPANY POSITION
MicroAge, Inc. Executive Vice President,
Chief Financial Officer,
and Treasurer
153000 Canada Limited Treasurer
Complete Distribution, Inc. Treasurer
ConnectWorks, Inc. Treasurer
Contract PC, Inc. Treasurer
ELERIS, Inc. Treasurer
InterCom Marketing, Inc. Treasurer
InterPC DE BOLIVIA Treasurer
InterPC DE COLOMBIA Treasurer
InterPC DE ECUADOR Treasurer
InterPC DE VENEZUELA Treasurer
MaxSource, L.L.C. Treasurer
MCCI Holding Company Treasurer
MCSS, Inc. Treasurer
MicroAge Administration, Inc. Treasurer
MicroAge Computer Centers, Inc. Treasurer
MicroAge Deutschland GmbH Director and Treasurer
MicroAge Europe Limited Treasurer
MicroAge Government, Inc. Treasurer
MicroAge Infosystems Services, Inc. Treasurer
MicroAge Infosystems Services Europe, Limited Treasurer
MicroAge L&D L.L.C. Treasurer
MicroAge of California, Inc. Treasurer
MicroAge Paymaster, Inc. Treasurer
MicroAge Technologies, Inc. Treasurer
MicroAge Technology Services, L.L.C. Treasurer
MicroAge Teleservices, L.L.C. Treasurer
MicroAge (UK) Limited Director and Treasurer
MicroAge Ventures, Inc. Treasurer
MTS Holding Company Treasurer
PCClearance, Inc. Treasurer
PriTech Solutions, Inc. Treasurer
Pinacor, Inc. Treasurer
Pinacor Logistics Services, Inc. Treasurer
Quality Integration Services Treasurer
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Exhibit C
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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 8, 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, MicroAge, Inc., 0000 Xxxxx XxxxxXxx Xxx, Xxxxx,
Xxxxxxx 00000-0000.
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VERIFICATION
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 8th 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
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((Policy Change of Ownership)
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