Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
this 1st day of March, 1999 by and between XXXXXXXXX.XXX CORPORATION, a Delaware
corporation (the "Company"), and XXXXXX X. XXXXXXXX (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 President of the Company (which is a
wholly owned subsidiary of Miami Computer Supply Corporation, an Ohio
corporation ("MCSC")), commencing on the date abovewritten and ending on March
1, 2002 (the "Employment Term"), and the Executive hereby accepts said
employment. The Agreement may be renewed at the option of the Company for
additional periods of one year each (a "Renewal Term") by the giving of written
notice to the Executive at least ninety (90) days prior to the expiration of the
Employment Term or a Renewal Term, as the case may be; provided, that the
Executive shall have the option to decline such renewal by providing written
notice thereof to the Company no later than sixty (60) days after receipt of any
such renewal notice from the Company.
B. The Executive's areas of responsibility shall be commensurate with
his position as President and co-founder and as directed by the Board of
Directors and may include all aspects of the Company's business, including, but
not limited to, supervising and overseeing day-to-day operations, sales,
financial reporting, strategic planning, 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 of the
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Company. The Executive's services shall be rendered with due regard for the
prompt, efficient and economical operation of the business of the Company.
II. BASE SALARY AND BENEFITS
A. The Executive shall be paid a base salary (the "Base Salary") of
$90,000.00 per year, payable at least monthly when all other employees of the
Company are customarily paid.
B. The Executive will be able to take up to five (5) weeks paid
vacation per year.
C. During the Employment Term and any Renewal Term, the Executive will
be entitled to participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock option, employee stock ownership,
or other plans, benefits and privileges given to employees and executives of the
Company. The Company shall not make any changes in such plans, benefits or
privileges which would adversely affect the Executive's vested rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all executive officers of the Company at equivalent base salary levels and
does not result in a proportionately greater adverse change in the rights of or
benefits to the Executive as compared with any such other executive. 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 II.A hereof. Nothing contained herein shall
prohibit the Board of Directors of the Company, in its sole discretion, from
increasing the compensation payable to the Executive pursuant to this Agreement
and/or making available to the Executive other benefits in addition to those to
which the Executive is entitled hereunder.
D. In addition to the foregoing, the Executive shall, at all times
during the Employment Term and any Renewal Term, 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 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.
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, travel, entertainment and other business expenses
incurred by him in the performance of his duties under
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this Agreement and as are customary for the Executive's role in the Company,
upon presentation of expense statements, receipts or vouchers or such other
supporting information as the Company may reasonably require.
III. TERMS AND CONDITIONS OF EMPLOYMENT
A. Unless earlier terminated pursuant to terms hereof, the term of
employment hereunder shall end on the earliest to occur of:
1. The later of the Employment Term or any Renewal Term;
2. The death or retirement of the Executive;
3. On ten (10) days' 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 more than 90 days (or for shorter
periods aggregating more than 90 days during any consecutive twelve-month
period) during which the Executive was physically or mentally incapacitated (as
reasonably determined by the Board of Directors based on objective medical
evidence obtained consistent with the Americans with Disabilities Act) 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 III.A,
the Company shall be entitled to terminate this Agreement for "cause" upon
written notice to the Executive, the cause to be specified in the notice. For
purposes of this Agreement, "cause" shall be determined by the affirmative vote
of a majority of the Board of Directors of the Company (excluding the Executive,
if a member of the Board) and shall mean (i) Executive's incompetence in the
performance of his duties under this Agreement, (ii) Executive's personal
dishonesty adversely affecting the Company, (iii) the Executive's refusal to
perform, or the substantial neglect of, or an intentional failure to perform, a
material portion of the Executive's duties required hereunder, which actions or
inactions are not reasonably cured within ten (10) days after receipt of written
notice from the Company with respect thereto, (iv) the Executive's willful
misconduct adversely affecting the Company or the Executive's material
negligence, (v) breach of a fiduciary duty to the Company involving personal
gain, (vi) sexual harassment by the Executive of any Company employee, officer,
director, representative, agent, customer or vendor, (vii) assault by the
Executive of any Company employee, officer, director, representative, agent,
customer or vendor, (viii) any material breach by the Executive of this
Agreement not reasonably cured with ten (10) days after receipt of written
notice thereof, (ix) if the Executive has been convicted of a felony or a crime
involving moral turpitude,
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theft, fraud or embezzlement, (x) the intentional or reckless conversion of
Company funds, or the destruction of Company assets by the Executive.
C. The Executive shall have the right to terminate this Agreement for
good reason upon reasonable notice to the Company, the good reason to be
specified in the notice.
1. For purposes of this Agreement, "good reason" shall
mean the failure of the Company to provide material resources which are
necessary to the fulfillment of the Executive's responsibilities hereunder, and
which failure(s) is not reasonably cured within ten (10) days after receipt of
written notice thereof from the Executive; or
2. The express direction to the Executive by 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 or is both
materially beyond the scope of the duties required of the Executive under this
Agreement and not commensurate with his position as President of the Company; or
3. The threatened or actual insolvency or receivership of
the Company or MCSC; or
4. The material failure of the Company to perform its
obligations to the Executive as set forth in this Agreement.
D. Except as hereinafter provided with respect to Sections III.C.1.,
2., and 4., termination in accordance with any of the foregoing provisions of
Sections III.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
or the Company's obligations as set forth under Sections IV and IX, below. In
the event, the Executive terminates this Agreement pursuant to Sections
III.C.1., 2., and 4., above, the Executive shall be entitled to receive
compensation in the form of severance pay equal to the lesser of (i) $14,795, if
such termination occurs more than sixty (60) days prior to the end of the
Initial Term or any Renewal Term of this Agreement, or (ii) $247.00 per day for
each day prior to the end of the Initial Term or any Renewal Term, if such
termination occurs less than sixty (60) days prior to the end of the Initial
Term or any Renewal Term.
IV. NON-COMPETITION
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A. 1. The Company has disclosed to the Executive its confidential
business plans, marketing strategies, advertising copy, funding sources,
wholesale and retail customer lists, equipment sources, financial projections
and results and other confidential information concerning the Company in the
course of the Executive's occupation as President and co-founder 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 preserve this information and protect it 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."
2. In the course of performing his duties under this Agreement, the
Executive will both help develop and be privy to Proprietary Information. All
Proprietary Information used or generated during the course of the Executive's
employment with the Company will be the property of the Company, except for such
information that was developed by the Executive and was published or otherwise
disseminated prior to the date hereof and specifically listed and described on
an attachment hereto. The Executive acknowledges and agrees that all works of
authorship, including, without limitation, program codes or documentation,
produced by him in the course of performing services for the Company, are works
for hire and the property of the Company. The Executive further assigns to the
Company his entire right, title and interest in any invention, technique,
process, devise, discovery, improvement or know-how, patentable or not,
hereafter made or conceived solely or jointly by him while working for the
Company, which relates in any manner to the actual or anticipated business or
research or development of the Company or MCSC, or is suggested by or results
from any task assigned to him or work performed by him for or on behalf of the
Company or MCSC, or for which MCSC or Company equipment, supplies, facilities,
information or materials are used. Any such invention, technique, process,
device, discovery, improvement or know-how shall be promptly disclosed to the
Company and the Executive shall specifically assign the title thereto to the
Company and do anything else reasonably necessary to enable the Company to
obtain proprietary rights in the United States or foreign countries. The
Executive shall deliver to the Company all documents and other tangibles
containing Proprietary Information upon termination of his employment with the
Company pursuant to Section III hereof or otherwise within three days after the
Company so requests.
3. 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 seven (7) years following termination of this
Agreement, the Executive shall not (a) remove Proprietary Information from
Company or MCSC premises; (b) use Proprietary Information for his own benefit or
for the
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benefit of any third party; and (c) disclose Proprietary Information to any
third party (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.
4. These restrictions on the use and disclosure of Proprietary
Information shall survive the expiration or termination of this Agreement for a
period of seven (7) years thereafter, 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 limited the generality of the foregoing, injunctive relief and specific
performance.
5. These restrictions on the use and disclosure of Proprietary
Information shall not apply to any information that is or becomes generally
disclosed to the public otherwise than by the Executive's breach of this
Agreement.
B. 1. During the term of this Agreement and for twelve months
thereafter ending on the first anniversary of the Termination Date (the
"Non-compete Term"), 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 associated as an officer, director or greater than 5% shareholder,
employee, consultant, agent or representative to or with any Person that sells
or distributes computer supplies or projection presentation products in an area
within a seventy-five (75) mile radius of any existing office of the Company or
MCSC. For purposes of the 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 shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the activities, affairs,
management or policies of such Person, whether through personal relationship,
the ownership of voting securities or by contract or otherwise.
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
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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 Employment Term and any Renewal Term and in consideration of the
receipt of any payment pursuant to this Agreement, for a period beginning on the
Termination Date and ending upon the expiration of the Non-compete Term, 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 a Customer, Supplier, Employee, Salesperson, Agent or
Representative of the Company in any manner which interferes or might interfere
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 with the Company, or (ii) during
the period beginning on the Termination Date and ending upon the expiration of
the Non-compete Term, solicit for employment or assist any Person in the
solicitation for employment of any 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 is currently
engaged to provide goods or services, has been engaged to provide goods or
services within one (1) year 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 within one (1) year prior to the
Termination Date.
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(c) "Supplier," "Employee," "Salesperson," "Agent" or "Representative"
each means any Person who is then serving, or has served, the Company in such
capacity at any time within one (1) year 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
goodwill 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 a 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.
VI. BINDING EFFECT
The Company and the Executive represent and warrant that they are able
to enter into this Agreement and that such ability is not limited or restricted
by any agreements or understandings entered into by the Company or the Executive
with other persons or other companies. 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.
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VII. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of California. All disputes between the parties, except
disputes under Section IV, 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
of 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 California 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 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 California law and equity are available to the parties
hereto and shall be applicable as though in a court of law. Each party shall be
responsible for its own costs and fees of any such arbitration.
IX. INDEMNIFICATION; WITHHOLDING; MCSC'S ASSURANCES
A. 1. The Company shall indemnify the Executive against all judgments,
payments in settlement (whether or not approved by a court), fines, penalties
and other costs and expenses (including attorneys fees and costs) imposed upon
or incurred by the Executive in connection with
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or resulting from any action, suit, proceeding, stockholder's derivative action,
investigation or claim, civil, criminal, administrative or other proceeding, or
any appeal relating thereto, which is brought or threatened by any Person or
government authority (an "Action") and in which the Executive is made a party or
is otherwise involved by reason of his being or having been a director, officer,
employee or agent of the Company, MCSC or any Person affiliated with either of
the foregoing, or by reason of any action or omission or alleged action or
omission by the Executive in any such capacity.
2. The Executive shall be entitled to such indemnification if
either (i) the Executive is wholly successful, on the merits or otherwise, in
defending such Action, or (ii) in the judgment of a court of competent
jurisdiction or, in the absence of such determination, in the judgment of a
majority of a quorum of the Board of Directors of the Company (which quorum
shall not include any director who is a party to or is otherwise involved in
such action), or, in the absence of such a disinterested quorum, in the opinion
of independent legal counsel that the Executive acted in good faith in what he
reasonably believed to be in the best interest of the Company, and in addition,
in any criminal action had no reasonable cause to believe that his action was
unlawful.
3. The foregoing rights of indemnification shall be in
addition to any rights which the Executive may otherwise be entitled pursuant to
any agreement, vote of shareholders, at law, in equity or otherwise.
4. In any case in which it reasonably appears that the
Executive will be entitled to indemnification hereunder, such amounts as shall
be determined by a majority of a disinterested quorum of the Board, in the
reasonable exercise of its discretion, shall be advanced to the Executive to
cover the costs and expenses incurred by him in connection with the action,
suit, proceeding, investigation or claim prior to the final disposition thereof.
In such case, the Executive shall undertake in writing to repay such amounts if
it is ultimately determined that he is not entitled to indemnification.
B. All payments 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.
C. The Company has received assurances from MCSC that, for a period of
five years from the date of incorporation of the Company, MCSC shall not
operate, or invest in, any person or entity which sells computer supplies over
the Internet to the single office, home office ("SOHO") market.
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IN WITNESS WHEREOF, the Company and the Executive have set their hands
on the date above written.
ATTEST:
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxx
"Executive"
ATTEST: XXXXXXXXX.XXX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
"Company"
