XXXXXXX COMPUTER RESOURCES, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 24th day of July, 1997, by and
between XXXXXXX COMPUTER RESOURCES, INC., a Delaware corporation
("Company"), and XXXXXX X. XXXXXXXXXX ("Employee").
W I T N E S S E T H :
WHEREAS, Company has entered into an Asset Purchase Agreement
("Purchase Agreement") of even date pursuant to which it bought
certain assets of MICROCARE, INC. and MICROCARE COMPUTER
SERVICES, INC. (collectively, "MICROCARE"); and
WHEREAS, Employee owns one hundred percent (100%) of the
outstanding stock of MICROCARE; and
WHEREAS, as an inducement for and in consideration of Company
entering into the Purchase Agreement with MICROCARE and
purchasing certain of its assets, Employee has agreed to enter
into and execute this Employment Agreement pursuant to Section 5
thereof; and
WHEREAS, Company desires to engage the services of Employee,
pursuant to the terms, conditions and provisions as hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein set forth, the parties hereby
covenant and agree as follows:
1. Employment. The Company agrees to employ the Employee, and
the Employee agrees to be employed by the Company, upon the
following terms and conditions.
2 Term. The initial term of Employee's employment pursuant to
this Agreement shall begin on the 24th day of July, 1997, and
shall continue for a period of three (3) years ending July 23,
2000 unless terminated earlier pursuant to the provisions of
Section 10, provided that Sections 8, 9, 10(b), 10(c), 11, if
applicable, and 20, shall survive the termination of such employ
ment and shall expire in accordance with the terms set forth
therein.
3. Renewal Term. The term of Employee's employment shall
automatically renew for additional consecutive renewal terms of
one (1) year unless either party gives written notice of his/its
intent not to renew the terms of this Agreement sixty (60) days
prior to expiration of the then expiring term. Employee's base
salary for each renewal term shall be determined by Company,
provided, however, Employee's annual base salary for any renewal
term shall not be less than the base salary in effect for the
prior year.
4. Duties. Employee shall serve as Vice President of
Operations for the Company's Indiana Division. Employee shall
perform such duties in Xxxxxx County, Indiana or the counties
contiguous to Xxxxxx County, Indiana. Employee shall be
responsible to and report directly to the corporate officers of
Company. The duties assigned to Employee shall not be
inconsistent with those typically assigned to a person holding
the position set forth above and Employee shall at all times have
such powers and authority as shall be reasonably required to
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discharge such duties in an efficient manner, together with such
facilities and services as are appropriate to his position.
Employee shall devote his best efforts and substantially all his
time during normal business hours to the diligent, faithful and
loyal discharge of the duties of his employment and towards the
proper, efficient and successful conduct of the Company's
affairs. Employee further agrees to refrain during the term of
this Agreement from making any sales of competing services or
products or from profiting from any transaction involving
computer services or products for his account (except pursuant to
Section 4.4 of the Asset Purchase Agreement) without the express
written consent of Company.
5. Compensation. For all services rendered by the Employee
under this Agreement (in addition to other monetary or other
benefits referred to herein), compensation shall be paid to
Employee as follows:
Base Salary: During the term of this Employment Agreement,
Employee shall be paid an annual base salary of One Hundred
Twenty-Five Thousand Dollars ($125,000.00) per year, Said annual
base salary shall be payable in accordance with the historical
payroll practices of the Company.
6. Fringe Benefits. During the term of this Agreement,
Employee shall be entitled to the following benefits:
(a) Health Insurance - Employee shall be provided with the
standard family medical health and insurance coverage maintained
by Company on its employees. Company and Employee shall each pay
fifty percent (50%) of the cost of such coverage.
(b) Vacation - Employee shall be entitled each year to a
vacation of three (3) weeks during which time his compensation
will be paid in full. Provided, however, such weeks may not be
taken consecutively without the written consent of Company.
(c) Retirement Plan - Employee shall participate, after
meeting eligibility requirements, in any qualified retirement
plans and/or welfare plans maintained by the Company during the
term of this Agreement.
(d) Other Company Programs - Employee shall be eligible to
participate in any other plans or programs implemented by the
Company for all of its employees with duties and responsibilities
similar to Employee.
(e) Employee shall be responsible for any and all taxes
owed, if any, on the fringe benefits provided to him pursuant to
this Section 6.
7. Expenses. During the term of Employee's employment
hereunder, Employee shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and
entertainment expenses or other out-of-pocket business expenses
incurred by Employee in fulfilling the Employee's duties and
responsibilities hereunder, including, all expenses of travel and
living expenses while away from home on business or at the
request of and in the service of the Company, provided that such
expenses are incurred and accounted for in accordance with the
reasonable policies and procedures established by the Company.
8. Non-Competition. Employee expressly acknowledges the
provisions of Section 8 of the Purchase Agreement relating to
Employee's Covenant Not to Compete with Company. Accordingly,
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such provisions of Section 8 are incorporated herein by reference
to the extent as if restated in full herein. In addition to the
consideration received under this Agreement, Employee
acknowledges that as a shareholder of MICROCARE, he has received
substantial consideration pursuant to such Purchase Agreement and
that as an inducement for, and in consideration of Company
entering into this Agreement, Employee has agreed to be bound by
such provisions of Section 8 of the Purchase Agreement.
Accordingly, such provisions of Section 8 and Exhibit N-2 and the
restrictions on Employee thereby imposed shall apply as stated
therein.
9. Non-Disclosure and Assignment of Confidential Information.
The Employee acknowledges that the Company's trade secrets and
confidential and proprietary information, including without
limitation:
(a) unpublished information concerning the Company's:
(i) research activities and plans,
(ii) marketing or sales plans,
(iii) pricing or pricing strategies,
(iv) operational techniques,
(v) customer and supplier lists, and
(vi) strategic plans;
(b) unpublished financial information, including
unpublished information concerning revenues, profits and profit
margins;
(c) internal confidential manuals; and
(d) any "material inside information" as such phrase is
used for purposes of the Securities Exchange Act of 1934, as
amended;
all constitute valuable, special and unique proprietary and trade
secret information of the Company. In recognition of this fact,
the Employee agrees that the Employee will not disclose any such
trade secrets or confidential or proprietary information (except
(i) information which becomes publicly available without
violation of this Employment Agreement, (ii) information of which
the Employee did not know and should not have known was disclosed
to the Employee in violation of any other person's
confidentiality obligation, and (iii) disclosure required in
connection with any legal process), nor shall the Employee make
use of any such information for the benefit of any person, firm,
operation or other entity except the Company and its subsidiaries
or affiliates. The Employee's obligation to keep all of such
information confidential shall be in effect during and for a
period of five (5) years after the termination of his employment
in those states where Company has business offices; provided,
however, that the Employee will keep confidential and will not
disclose any trade secret or similar information protected under
law as intangible property (subject to the same exceptions set
forth in the parenthetical clause above) for so long as such
protection under law is extended.
10. Termination.
(a) The Employee's employment with the Company may be
terminated at any time as follows:
(i) By the Employee at his discretion, upon sixty (60)
days written notice to Company;
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(ii) By Employee's death;
(iii) By Employee's physical or mental disability which
renders Employee unable to perform his duties hereunder for a
consecutive period of ninety (90) days or for an aggregate of
one hundred twenty (120) days or more during any twelve (12)
month period.
(iv) By the Company, for cause upon fifteen (15) day's
written notice to Employee. For purposes of this Agreement, the
term "cause" shall mean termination upon: (i) the continuous
failure by Employee to substantially perform his duties with the
Company (other than any such failure resulting from his
incapacity due to physical or mental disability), after a written
demand for substantial performance is delivered to him by the
Company, which demand specifically identifies the manner in which
the Company believes that he has not continuously substantially
performed his duties; (ii) the engaging by Employee in conduct
which is demonstrably and materially injurious to the Company,
monetarily or otherwise, including but not limited to any
material misrepresentation related to the performance of his
duties; (iii) the conviction of Employee of a felony or other
crime involving theft or fraud, (iv) Employee's gross neglect or
gross misconduct in carrying out his duties hereunder resulting,
in either case, in material harm to the Company; or (v) any
material breach by Employee of this Agreement. Notwithstanding
the foregoing, Employee shall not be deemed to have been
terminated for cause unless and until there shall have been
delivered to him a copy of a resolution of the Board of Directors
of the Company or any appropriately designated committee of the
Board, finding that he has engaged in the conduct set forth above
in this Section 10(a)(iv) and specifying the particulars thereof
in detail, and Employee shall not have cured or abated such
conduct to the reasonable satisfaction of the Board within thirty
(30) days of receipt of such resolution.
(v) By the Company at its discretion, without cause,
upon thirty (30) days written notice to Employee; provided that
Company complies with the provisions of Section 10(c).
(b)Compensation upon Termination: In the event of
termination of employment, the Employee or his estate, in the
event of death, shall be entitled to his annual base salary and
other benefits provided hereunder to the date of his termination.
(c)In the event that Company would terminate Employee's
employment hereunder without cause pursuant to Section 10(a)(v),
Company shall be obligated to pay Employee, as severance pay,
Employee's annual base salary for the remaining term, including
the current renewal term, if applicable, of the Agreement and (as
set forth in Section 2) as due.
11. Disability. In the event that Employee becomes temporarily
disabled and/or totally and permanently disabled, physically or
mentally, which renders him unable to perform his duties
hereunder, Employee shall receive one hundred percent (100%) of
his base annual salary (in effect at the time of such disability)
for a period of one (1) year following the initial date of such
disability (offset by any payments to the Employee received
pursuant to disability benefit plans, if any, maintained by the
Company.) Such payments shall be payable in twelve consecutive
equal monthly installments and shall commence thirty (30) days
after the determination by the physicians of such disability as
set forth below.
For purposes of this Agreement, Employee shall be deemed to
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be temporarily disabled and/or totally and permanently disabled
if attested to by two qualified physicians, (one to be selected
by Company and the other by Employee) competent to give opinions
in the area of the disabled Employee's physical and/or mental
condition. If the two physicians disagree, they shall select a
third physician, whose opinion shall control. Employee shall be
deemed to be temporarily disabled and/or totally and permanently
disabled if he shall become disabled as a result of any medically
determinable impairment of mind or body which renders it
impossible for such Employee to perform satisfactorily his duties
hereunder, and the qualified physician(s) referred to above
certify that such disability does, in fact, exist. The opinion
of the qualified physician(s) shall be given by such
physician(s), in writing directed to the Company and to Employee.
The physician(s) decision shall include the date that disability
began, if possible, and the 12th month of such disability, if
possible. The decision of such physician(s) shall be final and
conclusive and the cost of such examination shall be paid by
Employer.
12. Severability. In case any one (1) or more of the provisions
or part of a provision contained in this Agreement shall be held
to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement. In
such a situation, this Agreement shall be reformed and construed
as if such invalid, illegal or unenforceable provision, or part
of a provision, had never been contained herein, and such
provision or part shall be reformed so that it will be valid,
legal and enforceable to the maximum extent possible.
13. Governing Law. This Agreement shall be governed and
construed under the laws of the State of Indiana and shall not be
modified or discharged, in whole or in part, except by an
agreement in writing signed by the parties.
14. Notices. All notices, requests, demands and other
communications relating to this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally
or mailed by certified or registered mail, return receipt re
quested, postage prepaid to the following addresses (or to such
other address for a party as shall be specified by notice
pursuant hereto):
If to Company, to: Pomeroy Computer Resources, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxx X. Xxxxx III
Xxxxxxxxx & Dreidame Co., L.P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
If to Employee, to: the Employee's residential address, as
set forth in the Company's records
With a copy to: Xxxxx Xxxxxxx, Esq.
Leagre Xxxxxxxx & Xxxxxxx
0000 Xxxxxxxx Xxxxxxxx #000
Xxxxxxxxxxxx, Xxxxxxx 00000
15. Enforcement of Rights. The parties expressly recognize that
any breach of this Agreement by either party is likely to result
in irrevocable injury to the other party and agree that such
other party shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction in
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Xxxxxx County, Indiana, either at law or in equity, to obtain
damages for any breach of this Agreement, or to enforce the
specific performance of this Agreement by each party or to enjoin
any party from activities in violation of this Agreement. Should
either party engage in any activities prohibited by this
Agreement, such party agrees to pay over to the other party all
compensation, remuneration, monies or property of any sort
received in connection with such activities. Such payment shall
not impair any rights or remedies of any non-breaching party or
obligations or liabilities of any breaching party pursuant to
this Agreement or any applicable law.
16. Entire Agreement. This Agreement and the Purchase Agreement
referred to herein contain the entire understanding of the
parties with respect to the subject matter contained herein and
may be altered, amended or superseded only by an agreement in
writing, signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
17. Parties in Interest.
(a) This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent
of the other party hereto; provided, however, that nothing in
this Section 17 shall preclude (i) Employee from designating a
beneficiary to receive any benefit payable hereunder upon his
death, or (ii) executors, administrators, or legal
representatives of Employee or his estate from assigning any
rights hereunder to person or persons entitled thereto.
Notwithstanding the foregoing, this Agreement shall be binding
upon and inure to the benefit of any successor corporation of
Company
(b) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the assets of the Company or the
business with respect to which the duties and responsibilities of
Employee are principally related, to expressly assume and agree
to perform this Agreement in the same manner and to the same
extent that Company would have been required to perform it if no
such succession had taken place. As used in this Agreement
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which
executes and delivers the assumption agreement provided for in
this Section 17 or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
18. Representations of Employee. Employee represents and
warrants that he is not party to or bound by any agreement or
contract or subject to any restrictions including without
limitation any restriction imposed in connection with previous
employment which prevents Employee from entering into and
performing his obligations under this Agreement.
19. Counterparts. This Agreement may be executed simultaneously
in several counterparts, each of which shall be deemed an
original part, which together shall constitute one and the same
instrument.
20. Attorneys' Fees. In the event of any dispute arising
between Employee and Company, pursuant to this Agreement, the
prevailing party shall be entitled to recover from the non-
prevailing party, the prevailing party's reasonable attorneys'
fees and costs.
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IN WITNESS WHEREOF, this Agreement has been executed effective as
of the day and year first above written.
WITNESSES: XXXXXXX COMPUTER RESOURCES, INC.
__________________________
__________________________
By:_________________________________
__________________________
__________________________
____________________________________
XXXXXX X. XXXXXXXXXX
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