Exhibit 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this
15th day of December, 1998, by and between Xxxxxx Business Products Corporation
(formerly known as MCSC Buckeye Acquisition Corporation) (the "Company") and
Xxxxxxx Xxxxxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Company desires to employ the Executive and the Executive
desires to be employed by the Company;
NOW, THEREFORE, upon the terms and conditions hereinafter set forth, it is
hereby agreed between the Parties as follows:
I. DUTIES
A. Upon the terms and subject to the conditions of this Agreement, the
Company hereby employs the Executive as Vice President, Advanced Technology
Group of the Company (which is a wholly owned subsidiary of Miami Computer
Supply Corporation ("MCSC")), and the Executive hereby accepts said employment.
B. The Executive's areas of responsibility shall be as directed by the
Board of Directors of the Company and may include all aspects of the Company's
business, including but not limited to, sales, financial reporting, strategic
planning, overseeing day-to-day operations, acquisitions, long range planning,
cash flow projections and any other duties specified by the Board of Directors.
The Executive shall, from time to time and as requested, report to the Board of
Directors with respect to his activities. The Executive agrees to exercise his
duties and responsibilities hereunder in good faith, with diligence, and in
accordance with sound business practice.
C. The Executive shall devote his full business time and efforts and all
reasonable energy and skill to the business of the Company and shall use his
best efforts to promote the interest thereof. The Executive's services shall be
rendered with due regard for the prompt, efficient and economical operation of
the business of the Company.
D. Except for occasional business trips which may be necessary or
desirable in connection with the performance of the Executive's duties, the
Executive shall not be required, without his consent, to perform any duties at
any location other than the principal place of business of the Company in
Strongsville, Ohio.
E. The Executive hereby agrees that the employment agreement dated
December 12, 1994 and July 30, 1998 (and as otherwise amended or supplemented)
between the Executive and Xxxxxx Business Products Corporation is hereby
terminated, canceled and rendered null and void,
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without liability of any party to any other party thereunder, except with
respect to any benefits earned prior to the date hereof.
II. TERMS AND CONDITIONS OF EMPLOYMENT
A. This Agreement shall commence on the date hereof and shall terminate on
the earliest to occur of:
1. December 15, 2001; or
2. The death or retirement of the Executive; or
3. On written notice of termination from the Company to the
Executive, which notice may be given only on or after there shall have elapsed a
consecutive period of 90 days (or a non-consecutive period of 120 days) during
any twelve month period during which the Executive was physically or mentally
incapacitated (as reasonably determined by the Board of Directors) and unable to
perform his duties hereunder; or
4. The resignation of the Executive.
B. In addition to the events described in the foregoing Section II.A, the
Company shall be entitled to terminate this Agreement upon written notice to the
Executive:
1. For cause, which for purposes of this Agreement shall be
determined by the affirmative vote of a majority of the Board of Directors
(excluding the Executive, if a member of the Board) and shall mean incompetence,
personal dishonesty, the refusal to perform, or the substantial neglect of, or
an intentional failure to perform, a material portion of the Executive's duties
and obligations on behalf of the Company, which actions or inactions are not
reasonably cured within sixty (60) days after receipt of written notice from the
Company with respect thereto; willful misconduct; breach of a fiduciary duty to
the Company involving personal gain; any material breach of this Agreement not
reasonably cured within ten (10) days after receipt of written notice thereof;
sexual harassment; or assault; or
2. If the Executive has been convicted of a felony or a crime
involving moral turpitude, theft, fraud, embezzlement, intentional or reckless
conversion of Company funds or destruction of Company assets.
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C. The Executive shall have the right to terminate this Agreement upon
reasonable notice to the Company:
1. For cause, which for purposes of this Agreement shall mean the
failure of the Company to provide resources which are necessary to the
fulfillment of the Executive's responsibilities, and which failure(s) are not
reasonably cured within ten (10) days after receipt of written notice hereof
from the Executive;
2. Upon the express direction of the Board of Directors to perform
any action or inaction which, in the reasonable opinion of the Executive and
upon written advice of his counsel is illegal;
3. Upon the threatened or actual insolvency or receivership of the
Company not caused by any action or inaction of the Executive; or
4. Upon the failure of the Company to perform its obligations to
Executive as set forth in this Agreement.
D. Termination in accordance with any of the foregoing provisions of
Sections II.A, B or C above shall be effective on the date applicable to the
particular termination section referred to above (the "Termination Date"), and
from and after such date, this Agreement shall be of no further force and
effect; provided, however, that no such termination shall affect: (i) a Party's
rights to seek damages or other relief in respect of a breach by the other Party
of his or its obligations under this Agreement, (ii) the Company's rights or the
Executive's obligations under Section IV. herein, or (iii) the Executive's
rights under Section III. hereof with respect to any compensation accrued or
stock vested through such date of termination.
III. BASE SALARY, VACATION AND FRINGE BENEFITS
A. The Executive shall be paid a base salary (the "Base Salary") of
$250,000.00 per year, payable in semi-monthly installments of $10,417.00 each.
Such Base Salary shall be renegotiated in good faith within the thirty (30) day
period prior to the end of each twelve (12) month period of this Agreement. In
no event shall the Base Salary for any twelve (12) month period of this
Agreement be less than the Base Salary for the immediately preceding twelve (12)
month period.
B. The Executive will be able to take up to five (5) weeks paid vacation
per year.
C. During the term of the Agreement, the Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option,
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employee stock ownership, or other plans, benefits and privileges given to
employees and executives of the Company, to the extent commensurate with his
then-existing duties and responsibilities, as fixed by the Board of Directors of
the Company. The Company shall not make any changes in such plans, benefits or
privileges which would adversely affect the Executive's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Company and does not result in a proportionately
greater adverse change in the rights of or benefits to the Executive as compared
with any other executive officer of the Company. Nothing paid to the Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the Base Salary payable to the Executive
pursuant to Section III.A hereof.
D. In addition to the foregoing, immediately after the date of this
Agreement, the Executive shall be covered by the same health insurance as
immediately prior to the date of this Agreement and at all times during the
period of the Executive's employment under this Agreement be eligible to
participate in and to be covered by all plans, if any, effective generally with
respect to executives of the Company with respect to life insurance, accident
insurance, health insurance, hospitalization, disability, and other benefits of
whatsoever kind or description, to the extent the Executive is eligible under
the terms of such plans, on the same basis as other executives of the Company
and without restriction or limitation by reason of this Agreement. The Executive
shall be entitled to all of the fringe benefits and perquisites of his office of
whatsoever kind or description made available generally to other executives of
the Company, including, but not limited to, customary paid holidays, without
restriction or limitation by reason of any specific benefit provided for in this
Agreement. Such benefits and perquisites shall specifically include but not be
limited to: (a) the use of a Company credit card(s) for the purpose of charging
ordinary and necessary Company business expenses, including but not limited to
gasoline, business meals, entertainment, travel and lodging; (b) all Country
Club dues and expenses at the club to which the Executive currently belongs or a
similar such club should the Executive change clubs excluding, though, personal
purchases made at the pro shop of any such club, in an amount not to exceed
$8,000.00 per annum; and (c) reimbursement for use of automobile in the monthly
amount of $500.00.
E. The Company shall pay or reimburse the Executive for all reasonable
out-of-pocket expenses incurred or paid by him in connection with the
performance of his duties under this Agreement, upon presentation of expense
statements or vouchers or such other supporting information as the Company may
require.
IV. NON-COMPETITION
A.1. The Company has disclosed to the Executive its confidential business
plans, marketing strategies, advertising copy, funding sources, wholesale and
retail customer lists,
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equipment sources, financial projections and results and other information in
the course of Executive's occupation as the ______________ of the Company. This
information and similar information yet to be developed by the Executive is
generally unknown to the public and gives the Company a competitive advantage
over those who do not have access to this information. The Company has taken and
will take care to protect this information from becoming generally known. The
Company has revealed this information to the Executive on the condition that he
keep it confidential and will require confidentiality from the Executive and all
other persons with access to the information in the future. The information
described above, therefore, constitutes valuable trade secrets of the Company
and is referred to below as "Proprietary Information." In the course of
performing his duties under this Agreement, the Executive will both help develop
and be privy to Proprietary Information.
2. The Company has and shall retain all exclusive rights in the
Proprietary Information. During the term of this Agreement and any extension
hereof and for a period of two (2) years thereafter, the Executive shall not
disclose Proprietary Information to any third party (except in connection with
the proper performance of his duties hereunder and except with respect to
response to judicial or administrative process, and such disclosure shall occur
only after written notification of the Company immediately after receipt of such
process and cooperation with the Company, if so requested, to assist in
obtaining confidential treatment of, or a protective order for, the Proprietary
Information), or make any commercial or academic use of the Proprietary
Information without the express written consent of the Company, which consent
may be withheld for any or no reason in the Company's sole discretion.
3. These restrictions on the use and disclosure of Proprietary Information
shall survive the expiration or termination of this Agreement, regardless of the
grounds or lack of grounds therefor. The Parties recognize and agree that, in
the event of a threatened or actual breach of this Section IV.A, the Company's
remedy at law will be inadequate to fully compensate the Company for its losses.
Therefore, the Company may enforce its rights hereunder by equitable remedies,
including without limiting the generality of the foregoing, injunctive relief
and specific performance.
B.1. During the term of this Agreement and for two years after the
Termination Date, the Executive hereby covenants and agrees that the Executive
(and any person or entity controlled by, under common control with or
controlling the Executive) will not sell or distribute, directly or indirectly,
or be financially or otherwise associated with anyone that sells or distributes
computer supplies or projection presentation products in an area within a
twenty-five (25) mile radius of any existing office of the Company or MCSC (the
"Prohibited Business"). For purposes of this Section IV.B.1, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any person or entity, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the activities, affairs,
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management or policies of such person or entity, whether through personal
relationship, the ownership of voting securities or by contract or otherwise.
The foregoing shall not prohibit the Executive from owning shares of stock of
MCSC, or any other entity affiliated with MCSC, nor from owning less than five
percent (5%) of the issued and outstanding shares of any publicly traded Company
that is in the Prohibited Business.
2. The Executive agrees that in the event that the Executive commits a
breach or threatens to commit a breach of any of the provisions of this Section
IV.B, the Company shall have the right and remedy to have the provisions of this
Section IV.B specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
immediate irreparable injury to the Company and that money damages will not
provide an adequate remedy at law for any such breach or threatened breach. Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company at law or in equity.
3. If any of the provisions of or covenants contained in this Section IV.B
are hereafter construed to be invalid or unenforceable in any jurisdiction, the
same shall not affect the remainder of the provisions or the enforceability
thereof in any other jurisdiction, which shall be given full effect, without
regard to the invalid portions or the unenforceability in such other
jurisdiction because of the duration or geographic scope thereof, the Parties
agree that the court making such determination shall have the power to reduce
the duration and/or geographic scope of such provision or covenants and, in its
reduced form, said provision or covenant shall be enforceable; provided,
however, that the determination of such court shall not affect the
enforceability of this Section IV.B in any other jurisdiction.
C.1. The Executive hereby acknowledges and recognizes the highly
competitive nature of the business of the Company and accordingly agrees that,
during the term of this Agreement and, in consideration of the receipt of any
payment pursuant to this Agreement, for a period of two years following the date
of termination of the Executive's employment under this Agreement, unless
otherwise agreed to in writing by the Company, the Executive shall not, either
directly or indirectly, in any manner or capacity, whether as principal, agent,
partner, officer, director, employee, joint venturer, salesman, or corporate
shareholder or otherwise for the benefit of any Person (as defined below), (i)
solicit the rendering of services to any Person of any kind whatsoever who is
then or has been at any time during a period of one year prior to the date of
the termination of Executive's employment under this Agreement (the "Termination
Date") a Customer (as defined below), employee, salesperson, agent or
representative of the Company in any manner which interferes with the
relationship of the Company with such Person, or in an effort to obtain such
Person as a customer, supplier, employee, salesperson, agent or representative
of any business in competition
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with the Company, or (ii) for a period of one year following the Termination
Date, hire or participate in the hiring by any Person of an employee of the
Company.
(a) "Person" means any individual, trust, partnership, corporation,
limited liability company, association, or other legal entity.
(b) "Customer" means any Person with whom the Company or any
subsidiary is currently engaged to provide goods or services, has been engaged
to provide goods or services within six (6) months prior to the Termination
Date, or actively marketed, discussed a project with, negotiated with, provided
a bid to or otherwise communicated with in an effort to obtain an engagement to
provide goods or services sold by the Company or any subsidiary within six (6)
months prior to the Termination Date.
2. It is expressly understood and agreed that although the Executive and
the Company consider the restrictions contained in Section IV.C of this
Agreement reasonable for the purpose of preserving for the Company its good will
and other proprietary rights, if a final judicial determination is made by a
court having jurisdiction that the time or territory or any other restriction
contained in Section IV.C of this Agreement is an unreasonable or otherwise
unenforceable restriction against the Executive, the provisions of Section IV.C
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such other extent as such
court may judicially determine or indicate to be reasonable.
V. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement as to the subject matter
hereof and there are no terms other than those contained herein. This Agreement
shall be interpreted in order to achieve the purposes for which it was entered
into. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. No variation hereof or amendment hereto shall be deemed to be
valid unless in writing and signed by the Parties hereto. No waiver by either
Party of any provision or condition of this Agreement by him or it to be
performed shall be deemed to be a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time. This Agreement is not
assignable by the Executive, but may be assigned by the Company to any affiliate
of the Company or by operation of law. The Executive shall not be required to
work for any other affiliate of MCSC or MCSC without his consent.
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VI. BINDING EFFECT
This Agreement shall inure to the benefit of and be binding upon the
Company, its successors and assigns, and the Executive, his heirs, executors,
administrators and legal representatives. The obligations of the Company
hereunder are unsecured and the Executive represents a general creditor of the
Company for compensation which may be due and owing. Nothing contained herein
shall create or require the Company to create a trust of any kind to fund any
benefits which may be payable hereunder, and to the extent that the Executive
acquires a right to receive benefits from the Company hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company. The foregoing sentence shall not apply to any fringe benefits provided
to the Executive to the extent otherwise required by law.
VII. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio. All disputes between the Parties shall be resolved by
alternative dispute resolution ("ADR") in the jurisdiction wherein the Executive
is domiciled.
VIII. ALTERNATIVE DISPUTE RESOLUTION
The Parties agree that it is in their best interests to resolve all
disputes or controversies (except for violations of Section IV) arising out of
this Agreement in a cost effective and timely manner. Therefore, any controversy
or claim arising out of this Agreement or the breach thereof, or the
interpretation thereof (except, in each case, with respect to Section IV), shall
be settled by binding arbitration in accordance with the Rules of the American
Arbitration Association applicable to employer disputes; and judgment upon the
award rendered in such arbitration shall be final and may be entered in any
court having jurisdiction thereof. Notice of the demand for arbitration shall be
filed in writing with the other Party to this Agreement and with the American
Arbitration Association. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claims, dispute or other matter in question would be barred by the applicable
statute of limitation. This agreement to arbitrate shall be specifically
enforceable under the prevailing arbitration law. Any Party desiring to initiate
arbitration procedures hereunder shall serve written notice on the other Party.
The Parties agree that an arbitrator shall be selected pursuant to these
provisions within thirty (30) days of the service of the notice of arbitration.
In the event of any arbitration pursuant to these provisions, the Parties shall
retain the rights of all discovery provided pursuant to the Ohio Code of Civil
Procedure and the Rules promulgated thereunder, except that all time periods
contained in said Code of Civil Procedure and its related Rules shall be
shortened by fifty percent (50%) for purposes of arbitration proceedings
hereunder. Any arbitration initiated pursuant to these provisions shall be on an
expedited basis and the dispute
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shall be heard within one hundred twenty (120) days following the serving of the
notice of arbitration and a written decision shall be rendered within sixty (60)
days thereafter. These procedures supplement the American Arbitration
Association's procedures and, if there is a conflict, these provisions shall
control. All rights, causes of action, remedies and defenses available under
Ohio law and equity are available to the Parties hereto and shall be applicable
as though in a court of law. The Parties shall share equally all costs of any
such arbitration.
IX. INDEMNIFICATION; WITHHOLDING
A. The Company shall fully indemnify and hold harmless Executive from any
and all claims, demands, judgments, liens, subrogation, or costs incurred by
Executive with respect to any claims or suits against Company and/or its Board
of Director by individuals, firms, or entities not a Party to this Agreement to
the extent permitted by the Company's Articles of Incorporation, Code of
Regulations and applicable corporate law.
B. All payments of Base Salary required to be made by the Company
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Company may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
X. NOTICES
A. Any notices or other communication required or permitted hereunder
shall be sufficiently given if sent by registered mail or certified mail,
postage prepaid, addressed, if to the Executive, to him at 00000 Xxxxxxxxx
Xxxxx, Xxxxxxxxx, Xxxx 00000 and if to the Company, to it at 0000 Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000, Attention: President--Chief Executive
Officer.
B. For purposes of all notices to be given pursuant to or arising out of
this Agreement including a demand for ADR, a Party will be presumed to have
received written notice on the date of the actual receipt thereof.
XI. COUNTERPARTS
This Agreement may be executed in numerous counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Executive have set their hands on
the date above written.
ATTEST:
/s/Xxxxxx Xxxxxxxxxx By: /s/Xxxxxxx Tribilcock
----------------------------- ------------------------------------
Xxxxxxx Xxxxxxxxxx
"Executive"
Xxxxxx Business Products Corporation
ATTEST: (f/k/a MCSC Buckeye Acquisition
Corporation)
/s/Xxxxxx Xxxxxxxxxx By: /s/Xxxxxxx X. Xxxxxx
----------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
"Company"
