EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made and entered as of this 8th day
of January, 1997, by and between The Peak Technologies
Group, Inc., ("Peak") a Delaware corporation with its
headquarters in Columbia, Maryland, and Xxxxxx X. Xxxxx
("Executive"), a resident of Illinois, and together
referred to as the parties.
1. Duties and Term.
A. Peak engages Executive as President and Chief
Operating Officer of Peak for a term of two (2) years (the
"Term"), commencing with the above date, and successive
terms of one (1) year each beginning automatically at the end
of the Term, to perform those duties customarily performed by
a President and Chief Operating Officer and those set forth in
the "Offer Letter", attached hereto and made a part hereof, and
reporting to Peak's Chairman and Chief Executive Officer
("CEO"). Executive shall also perform those additional duties
which may reasonably be specified by the CEO and Peak's
Board of Directors, from time to time, consistent with his
position as a senior executive. During the term of this
Agreement, Executive shall be included as part of the
management slate of directors recommended to the
shareholders for election to Peak' Board of Directors.
B. As a condition and during the term of his
employment Executive agrees to the following: (i) commence
his employment, full-time, no later than March 1, 1997 or such
earlier date as agreed to by the parties; (ii) devote his full
business time to the business and affairs of Peak and work
exclusively for Peak, and (iii) maintain a duty of loyalty and
care to Peak as an officer and director of Peak, as those terms
are defined in law and pursuant to this Agreement.
C. Executive may not engage in any other
remunerative work, provided, however, that Peak recognizes
that Executive may desire to write, speak and serve on boards
of directors, which may be done with the prior written approval
of the CEO, and which approval shall not be unreasonably
withheld. Executive represents and warrants that he has not
entered into any prior agreements, investments or commitments
which would in any manner limit his work, effort or activity on
behalf of and while employed by Peak.
2. Compensation and Benefits. The compensation and
benefits for Executive through the Term are set forth in the
Offer Letter and this Agreement. A portion of the Executive's
compensation, as determined in Executive's sole discretion,
will be deferred and placed in trust, in accordance with
applicable laws and regulations and Peak's 401(k) plan. The
compensation includes: (i) a "Severance Agreement", the form
of which is attached hereto, and which will provide
compensation and benefits for Executive in the event of a
change in control in Peak and providing for, among other
things, up to three (3) years of severance pay; (ii) insurance
coverage through all applicable insurance provided by Peak,
including, but not limited to, Director and Officer Liability
Insurance at the limits provided for officers and directors of
Peak and a full indemnity by Peak up to the limits allowed
under Delaware law; (iii) an initial grant of fifty-thousand
(50,000) stock options for Peak common stock; and, (iv) an
annual grant of additional stock options compatible with other
executives of the company and in accordance with Peak's
policies, and in all cases in the absolute discretion of the Board
of Directors. Peak further agrees as to (iii) and (iv) that Section
6(ii) of Peak's Stock Option Plan shall not apply to Executive
or any stock options issued to him and that Peak hereby agrees
to the registration of all stock issued to Executive within a
reasonable time after exercise of such options, and subject to
regulatory limitations, if any.
3. Termination by Executive.
A. Executive may terminate this Agreement any
time, other than for "Good Reason" as defined herein, upon one
hundred and twenty (120) days written notice to Peak, or in the
event of death or total disability (deemed voluntary
termination).
B. Executive may also terminate this Agreement at
any time, upon giving ninety (90) day notice, for "Good
Reason" which includes: (i) failure of Peak seek the
nomination of Executive to the Board of Directors within six
(6) months after Executive commences his employment; (ii)
failure of the officers to report to Executive; (iii) any reason
described as "Good Reason" in Section 1.6 of the Severance
Agreement I; (iv) a change of control as described in the
Severance Agreement I; and, (v) default by Peak in any of its
material obligations hereunder and failure to cure such default
in a reasonable period of time after receiving notice from
Executive.
4. Termination by Peak.
A. Peak may terminate this Agreement without
cause upon sixty (60) days written notice to Executive.
B. Peak may terminate this Agreement without
notice, at any time, for "Good Cause", which includes, but is
not limited to: (i) breach of the covenants contained in Sections
6, 7, 8 and 10 of this Agreement; (ii) willful gross malfeasance
resulting in material injury or loss to Peak; (iii) acts on behalf
of Peak as a result of which Executive is charged with a
criminal offense involving moral turpitude, dishonesty or
breach of trust; (iv) conviction of a felony or plea of guilty or
plea of guilty or no lo contendere with respect to a felony; and,
(v) breach of the duty of an officer or director imposed by law
or statute that involves an intentional, bad faith act that results
in material loss or injury to Peak.
C. Termination of this Agreement for any reason
whatsoever shall not preclude executive from receiving any
base salary, bonus or other benefit accrued through the date of
termination, and shall not affect any accrued amount due and
payable to Executive under the Severance Agreement I.
5. Executive's Severance Benefits Upon Termination.
A. If Executive is terminated by Peak for reasons
other than termination for Good Cause, during the Term and
any renewal term, or Executive leaves Peak for Good Reason,
during the Term and any renewal term, Executive shall be
entitled to the following: (i) the balance of his salary payable
under the terms of this Agreement plus twelve (12) additional
months of salary as severance, both amounts payable semi-
monthly and subject to all applicable taxes; (ii) payment of
$300,000.00, and a prorated payment of $300,000.00 divided
by the number of months, or partial months, worked by
Executive, both amounts payable semi-monthly and subject to
all applicable taxes; (iii) the vesting of all stock options as of
the date of termination; and, (iv) payment of fifteen percent
(15%) of his base salary, or up to $45,000 toward out-
placement services; and (v) continuation of payment for
premiums on all health and medical insurance for eighteen (18)
months, or so long as Executive remains eligible for such
insurance.
B. If Executive terminates his employment during
the Term or any renewal term, for other than Good Reason, and
does not accept or engage in employment with a third party or
entity, and does not otherwise violate any other terms of this
Agreement or any post-employment agreements or covenants,
Executive shall be entitled to the following: (i) the balance of
his salary under this Agreement, plus twelve (12) additional
months of severance, both payable semi-monthly and subject to
all applicable taxes; and, (ii) the vesting of all stock options.
X. Xxxxxxxxx payments and benefits provided for
in this Agreement and the Offer Letter are conditioned upon
Executive's continued compliance with this Agreement and all
post-employment covenants and agreements. If Peak wishes to
withhold payment, it must first commence enforcement of this
Agreement through the filing of a civil suit or criminal
complaint, then all payments provided for hereunder shall be
paid to and held by a court of competent jurisdiction or placed
in a mutually agreed upon escrow account, until such
proceeding has been resolved.
6. Return of Peak's Property and Non-Disclosure of Non-
Public Information.
A. Upon termination of his employment with Peak
for any reason, Executive shall return to Peak all records, data,
plans, customer lists, computer programs and related
documentation or other documents or materials of any nature
which are in his possession or control which he obtained from
Peak or compiled or produced for Peak during his employment
and any and all copies thereof, which shall include all
confidential information as defined above.
B. Executive agrees that he will not retain copies of
any Peak's documents or materials and will not disclose, reveal
or make available to, or inform any other person, firm,
corporation, partnership or other association of the names and
addresses of customers, information about prices charged to
customers, Peak's operating and sales techniques and methods,
or any other confidential proprietary information concerning
Peak, or any documents or information which contain or are
derived from confidential proprietary information concerning
Peak, its products, pricing, margins, vendor relationships,
contracts, stock, personnel, systems, software, policies or
techniques and methods of operation, provided, however, that
Executive shall disclose any information required or compelled
in any legal or judicial proceeding or otherwise in the public
domain through sources other than Executive, and shall notify
Peak of such legal or judicial proceeding in a reasonable time
prior to complying with such request or subpoena, so that Peak
may seek to protect its interests and information as necessary.
7. Covenant Not to Compete or Solicit. Executive
covenants and agrees that during his employment and for a
period of one (1) year following the later of: (i) the termination
of his employment, or (ii) the date set for the commencement
of his severance payments, and so long as Peak continues to
pay all severance benefits when due and Peak has not
undergone a "Change in Control" as defined in Severance
Agreement I, Executive will not for himself, or in conjunction
with any other person, firm, partnership, corporation or other
form of business organization or arrangement, whether as a
principal, agent, director, officer, manager, trustee,
representative, executive or consultant, for whatever reason,
directly or indirectly do any of the following:
A. Work for any competitor of Peak, or seek or
accept employment with any of Peak's clients if such
employment is in the same area, field and scope of products
and services which Peak sells or provides;
B. Solicit or accept any business from any person
or entity who, at the time of, or any time during the twelve
months preceding such termination, was an active account or
was actively solicited by Peak according to the books and
records of Peak, provided, however, that nothing herein shall
prohibit him from transacting business with any such person
during such period if the business he solicits is not competitive
with services or products offered, furnished to, licensed or sold
by Peak to such person or entity;
C. Cause or assist anyone or any entity to solicit
the purchase of any product or service by any of Peak's clients
of the sort provided by Peak to the client, or the sort Peak was
seeking an opportunity to supply or request or cause any of
Peak's clients, vendors or suppliers to cancel or terminate any
business relationship with Peak;
D. Request or cause any employee of Peak to
terminate employment with Peak or permit any employee of
Peak to be solicited to leave the employ of Peak.
8. Post Employment Affiliations and Restrictions.
Executive covenants and agrees that during his employment
and for a period of one (1) year following the later of: (i) the
termination of his employment; or, (ii) or the date set for
commencement of his severance payments, and so long as Peak
continues to pay all severance benefits when due and Peak has
not undergone a "Change in Control" as defined in Severance
Agreement I, Executive will not for himself, or in conjunction
with any other person, firm, partnership, corporation or other
form of business organization or arrangement, whether as a
principal, agent, director, officer, manager, trustee,
representative, Executive or consultant, directly or indirectly
develop, refine, modify or in any way be connected with or
give advice or consultation concerning software which is
trademarked, copyrighted, owned and/or proprietary to Peak,
and cannot be purchased in routine retail transactions.
9. Scope of Restrictions. If the scope of any restriction
contained in this Agreement is too broad to permit enforcement
of such restriction to its full extent, then such restriction shall
be enforced to the maximum extent permitted by law, and
Executive hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to
enforced such restriction. Executive acknowledges and agrees
that the covenants contained herein are necessary for the
protection of Peak's legitimate business interests and are
reasonable in scope and content.
10. Prohibition Against Use and Disclosure of Proprietary
or Confidential Information. Executive shall not use or divulge
to anyone for any reason any of the trade secrets or other
proprietary, secret, or other confidential information of Peak or
its clients, or any information which contains or is derived from
proprietary, secret or other confidential information, either
during his employment or after his termination for any reason,
provided, however, that Executive shall disclose any
information required or compelled in any legal or judicial
proceeding or otherwise in the public domain through sources
other than Executive, and shall notify Peak of such legal or
judicial proceeding in a reasonable time prior to complying
with such request or subpoena, so that Peak may seek to protect
its interests and information as necessary.
11. List of Competing Companies. Executive agrees that
prior to terminating his employment with Peak, and as a
condition of receiving any severance payments provided for
hereunder, Peak may supplement the list of competitive
companies attached hereto which Peak, in its sole discretion,
deems competitors and for and with whom Executive shall not
be employed in any manner whatsoever.
12. Remedies of Peak.
A. Executive agrees that he is able to engage in
other businesses for the purpose of earning a livelihood and
that the restrictive covenants in the Agreement will not
interfere with his ability to engage in other businesses.
Executive agrees that breach of the covenants and limitation in
this Agreement will cause irreparable harm to Peak in that
money damages will not amount to adequate compensation for
the breach, and he agrees that injunctive relief is appropriate to
prevent the continuation of such breach by Executive without
the necessity of proof of actual damage.
B. In the event of a breach as described in A above,
or a breach by Peak resulting in the filing of a lawsuit by
Executive against Peak in a court of competent jurisdiction, the
prevailing party shall be responsible for the other party's
reasonable legal fees, as ordered by a court of competent
jurisdiction, arbitrator, mediator, or agreed to by the parties,
provided, however, such fees will be limited to the equal of the
Executive's base annual income for the last year of
employment.
C. The parties agrees that the restrictive covenants
contained herein are reasonable in the sense that they are
necessary to protect Peak in its legitimate business interests.
D. This Agreement in no way affects Executive's
right to engage in any business not competitive with Peak.
Remedies set forth in this Agreement shall be in addition to
and not in limitation of any other remedies, including money
damages, which Peak might have, legal or equitable.
13. No Waivers. Any waiver by any of the parties hereto of
a breach of any of the provisions of this Agreement by any
other party shall not operate or be construed as a waiver by the
other parties of any of the rights and privileges of said parties
hereunder or of any subsequent breach.
14. Prohibition Against Assignment. Executive's rights
under this Agreement may not be assigned, except to a solvent
associated company, or as may be agreed by the parties in
writing.
15. Severability and Binding Nature of Agreement. The
parties hereto agree that the clauses of the Agreement are
severable and should any clause be declared invalid, it shall not
effect the validity of the remaining provisions of this
Agreement. The parties agree that the provisions hereof shall
be binding upon their successors in interest, heirs, next of kin,
personal representatives and assigns.
16. Entire Agreement. This Agreement, Offer Letter and
Attachments, Tier I Relocation Package, and Severance
Agreement I constitute the final and entire agreement between
the parties and no party shall be bound by any terms,
conditions, statements, warranties, or representations, oral or
written, not contained herein and no term or provision hereof
(including the terms and provisions of this paragraph) may be
altered, amended or modified in any way except by a writing
signed by all parties.
17. Governing Law. This Agreement shall be governed and
interpreted pursuant to the laws of the state of Maryland for all
purposes, and without regard to choice of law rules.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the day, month and year first above
written.
The Peak Technologies Group, Inc. Executive
/s/ Xxxxxxxx X.X. Xxxx /s/ Xxxxxx X. Xxxxx
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Xxxxxxxx X. X. Xxxx, Xxxxxx X. Xxxxx,
Chairman and Chief President and Chief
Executive Officer Operating Officer
