EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 15 day of July, 1998, is by and
between SCHOOL SPECIALTY, INC., a Wisconsin corporation (the "Company") and
XXXXX XXXXXX ZANDEN ("Employee").
RECITALS
The Company desires to continue to employ Employee and to have the benefit
of his skills and services, and Employee desires to accept employment with the
Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. EMPLOYMENT AND DUTIES. The Company hereby agrees to employ the Employee
and the Employee hereby accepts employment as the Chief Operating
Officer of the Company and agrees to devote his full business time and
efforts to the diligent and faithful performance of his duties as Chief
Operating Office hereunder under the direction of the CEO of the
Company. Such duties shall be performed from headquarters in the
Appleton, Wisconsin area. Through out the term of this Agreement, the
Employee shall be recommended by management of the Company to its
shareholders as a suitable candidate for a position on the Board of
Directors of the Company.
2. TERM OF EMPLOYMENT. Unless sooner terminated as hereinafter provided,
the term of the Employee's employment hereunder shall commence with and
only with the date of this agreement and shall continue for a period of
two (2) years. This Agreement may be terminated prior to the end of the
Term in the manner provided herein. In the event that this agreement is
not terminated pursuant to the terms of this Agreement, following the
first year of the initial term of two (2) years and any renewal terms
thereof, said agreement shall extend for successive renewal terms of two
(2) years each measured from the date of renewal, unless either party
shall notify the other party of their desire to not renew the term of
this agreement, with said notice to be made no later than ninety (90)
days prior to the expiration of the first year of the initial term of
this agreement or any then effective renewal term thereof.
3. COMPENSATION. For all services rendered by Employee, the Company shall
compensate Employee as follows:
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(a) BASE SALARY. Effective on the date hereof, the base salary payable to
Employee shall be Two Hundred Twenty Five Thousand Dollars
($225,000.00) per year or such greater amount as determined from time
to time by the Board of Directors of the Company (but not reviewed
less frequently than on an annual basis), payable on a regular basis
in accordance with the Company's standard payroll procedures, but not
less than monthly. It is understood that the base salary is a minimum
amount, and shall not be reduced during the term of this Agreement.
(b) INCENTIVE BONUS. During the initial term and any extensions thereof,
Employee shall be eligible to receive an incentive bonus based upon
his participation in the Company's senior management bonus program as
specified in Exhibit A as attached hereto. The first and last years
of employment will be prorated.
(c) PERQUISITES, BENEFITS, AND OTHER COMPENSATION. During the initial
term and any extensions thereof, Employee shall be entitled to
receive all perquisites and benefits as are customarily provided by
the Company to its executive employees, subject to such changes,
additions, or deletions as the Company may make generally from time
to time, as well as such other perquisites or benefits as may be
specified from time to time by the Board or the Chief Executive
Officer of the Company.
(d) STOCK OPTIONS.
The Employee shall be granted a combination of options granted
under the School Specialty, Inc, 1998 Stock Incentive Plan
Incentive Stock Option Agreement ("ISO") (as defined and qualified
under section 422 of the Internal Revenue Code of 1986, as amended
(the "Code")) and School Specialty, Inc, 1998 Stock Incentive Plan
Nonqualified Stock Option Agreement ("NSO") in a total amount of
230,620 shares of common stock of the Company (the "Option
Shares"). The Option Shares shall be composed of the maximum
amount of shares permitted to be issued under the terms of the ISO
with the balance to be issued under the terms of the NSO. The
ability to purchase the Option Shares shall have the following
characteristics: (i) an exercise price equal to $15.50 per share;
(ii) expiration date of June 10, 2008; (iii) fully vested when
granted but with no right to exercise before June 10, 1999 (unless
the Compensation Committee of the Board of Directors of the
Company provides otherwise before such date); and (iv) subject to
forfeiture on conditions as provided in the ISO and/or NSO
documents.
4. COVENANTS AND CONDITIONS.
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(a) The Employee will acquire information and knowledge respecting the
intimate and confidential affairs of the Company in the various
phases of its business. Accordingly, the Employee agrees that he
shall not for the period he receives severance pay under the terms of
this Employment Agreement from the Company, use for himself or
disclose to any person not employed by the Company any such knowledge
or information heretofore acquired or acquired during the term of
this employment hereunder including but not limited to the
prescribed requirements of Section 134.90 of the Wisconsin Statutes,
as hereinafter amended from time to time. Nothing in this agreement
shall be construed to limit or supersede the common law of torts or
statutory or other protection of trade secrets where such law
provides the Company with greater protections or protections for a
longer duration than that provided in this section 4 of this
Agreement.
(b) The Employee agrees that all memoranda, notes, records, papers, or
other documents and all copies thereof relating to the Company's
operations or business, some of which may be prepared by him, and all
objects associated therewith (such as models and samples) in any way
obtained by him shall be the Company's property. This shall
include, but is not limited to, documents and objects concerning
any process, apparatus, or product manufactured, used, developed,
investigated, or considered by the Company. The Employee shall
not, except for Company use, copy or duplicate any of the
aforementioned documents or objects, nor remove them from the
Company's facilities, nor use any information concerning them
except for the Company's benefit, either during his employment or
thereafter. The Employee agrees that he will deliver all of the
aforementioned documents and objects that may be in his possession
to the Company on termination of his employment, or at any other
time on the Company's request, together with his written
certification of compliance, except for those documents and
objects received as a director of the Company.
5. DEATH OR DISABILITY OF THE EMPLOYEE. The Employee's employment shall
terminate immediately upon his death. In the event the Employee becomes
physically or mentally disabled so as to become unable, for a period of
more than one hundred twenty (120) consecutive working days or for more
than one hundred twenty (120) working days in the aggregate during any
twelve (12) month period, to perform his duties hereunder on a
substantially full-time basis, the Company may at its option terminate
his employment upon not less than thirty (30) days written notice. The
Company's right to terminate the Employee's employment pursuant to the
preceding sentence shall cease in the event the notice of termination
provided for therein shall not be given during the period of the
Employee's disability or within ninety (90) days after such disability
ceases. In the event of termination, the Company shall be obligated to
pay the Employee's salary under paragraph 3 hereof, net of the gross
amount of Long Term disability benefits received by the Employee,
through the
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balance of the term of this Agreement and any then currently effective
extension thereof.
6. TERMINATION AND SEVERANCE COMPENSATION. The Company reserves the right
to terminate the Employee's employment under this agreement should any
of the following occur:
(a) The Employee's commission of a felony that is an act which, in the
opinion of the Board of Directors, is either abhorrent to the
community or is an intentional act, which the Board of Directors
considers materially damaging to the reputation of the Company or
its successors or assigns.
(b) The Employee's breach of or failure to perform his obligations in
accordance with the terms and conditions of this agreement.
(c) The death or disability of the Employee.
Should the term of the Employee's employment with the Company be
terminated pursuant to the terms of Section 6(b), (c) and 7 herein, the
Company shall pay to the Employee the Base Salary described in Section
3(a) for the balance of the then effective term of this Agreement.
7. RIGHTS AND OBLIGATIONS OF SUCCESSORS. In the event that any of the
following events occur a "Change in Control" shall be deemed to occur
for the purpose of this Agreement: (a) any person or group of persons
acting in concert becomes the beneficial owner, directly or
indirectly (excluding ownership by or through employee benefit
plans), of securities of the Company representing fifty percent (50%)
or more of the combined voting power of the Company's then
outstanding securities; (b) the Company is combined (by merger, share
exchange, consolidation, or otherwise) with another corporation and
as a result of such combination less than seventy five percent (75%)
of the outstanding securities of the surviving or resulting
corporation are owned in the aggregate by the former shareholders of
the Company; or (c) any person or group of persons acting in concert
obtains direct or indirect control of the Board of Directors of the
Company, other than the current shareholders of the Company. The
Employee shall have the right to terminate his employment under the
terms of this Agreement for a period of Sixty (60) days following the
Change in Control. In the event that the Employee shall not so elect
to terminate this Agreement, then this agreement shall be assignable
and transferable by the Company to any subsidiary or affiliate or to
any subsidiary or affiliate of the Company affiliated with the Change
in Control and shall inure to the benefit of and be binding upon the
Employee and his heirs and personal representatives and the Company
and its successors and assigns. In the event the Employee elects to
terminate employment, the Employee shall be paid through the term of
this Agreement and any then currently effective extension thereof.
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8. COVENANT NOT TO COMPETE. In consideration of the employment hereunder,
the Employee hereby agrees that during the term of his employment by the
Company and for the period that severance pay is paid under the terms of
this Agreement by the Company to the Employee, the Employee will not
either directly or indirectly own, have proprietary interest (except for
less then 5% of any listed company or company traded in the
over-the-counter market) of any kind in, be employed by, or serve as a
consultant to or in any other capacity for any firm, other than the
Company and its subsidiaries, engaged in the manufacture and
distribution of school supplies, equipment, furniture or other products
made and distributed by the Company or any of the Company's present or
future subsidiary corporations (acquired during the term of this
Agreement) during the period of the Employee's employment in the area
where they are engaged in business without the express written consent
of the Company. The Employee agrees that a breach of the covenant
contained herein will result in irreparable and continuing damage to the
Company for which there will be no adequate remedy at law and in the
event of any breach of such agreement, the Company shall be entitled to
injunctive and such other and further relief including damages as may be
proper.
9. NOTICE. All notices, demands and other communications hereunder shall be
deemed to have been duly given, if delivered by hand or mailed,
certified or registered mail with postage prepaid:
To the Company: School Specialty, Inc.
0000 Xxxxx Xxxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxxx XX, Esq.
Xxxxxxx & Xxxxxxx, S.C.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
To Employee: Xxxxx Xxxxxx Zanden
X0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
or to such other address as the person to whom notice is to be given may
have specified in a notice duly given to the sender as provided herein.
Such notice, request, claim, demand, waiver, consent, approval or other
communication shall be deemed to have been given as of the date so
delivered, telefaxed, mailed or dispatched and,
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if given by any other means, shall be deemed given only when actually
received by the addressees.
10. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement (including any
documents referred to herein) sets forth the entire understanding of the
parties hereto with respect to the subject matter contemplated hereby.
Any and all previous agreements and understandings between or among the
parties regarding the subject matter hereof, whether written or oral,
are superseded by this Agreement. This Agreement shall not be amended or
modified except by a written instrument duly executed by each of the
parties hereto. Any extension or waiver by any party of any provision
hereto shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
11. EXPENSES. The Company will pay all fees, expenses and disbursements of
their agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement, and its
enforcement.
12. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Wisconsin, without regard to its
conflict of laws principles.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
COMPANY: School Specialty, Inc.
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx, Chairman and Chief
Executive Office
EMPLOYEE:
/s/ Xxxxx Xxxxxx Zanden
--------------------------------------
Xxxxx Xxxxxx Zanden, Individually
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