AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this
"Agreement") is made as of March 29, 2000 by and between Xxxx X. Xxxxxx
("Executive") and ANICOM, INC., a Delaware corporation (the "Company").
PRELIMINARY RECITALS
WHEREAS, the Company is engaged in the business of selling and
distributing communication related wire, cable, fiber optics and computer
network and connectivity products (the "Business").
WHEREAS, Executive is currently employed by the Company as the
President and Chief Executive Officer of the Company, pursuant to that certain
Executive Employment Agreement, dated January 15, 1995, by and between the
Company and Executive (the "Current Employment Agreement").
WHEREAS, Executive has extensive knowledge and a unique understanding
of the operation of the Business.
WHEREAS, the Company and Executive desire to continue Executive's
employment relationship with the Company in his current positions as President
and Chief Executive Officer, all under the terms and conditions set forth
herein.
WHEREAS, the parties hereto desire to amend and restate the Current
Employment Agreement in the form of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Executive agree as follows:
1. Employment of Executive. The Company hereby employs Executive as the
Company's President and Chief Executive Officer, and Executive hereby accepts
such employment and agrees to act as President and Chief Executive Officer of
the Company, all in accordance with the terms and conditions of this Agreement.
2. Term of Employment. Subject to the termination provisions set forth in
Section 8 below, Executive's employment under this Agreement shall commence on
the date of this Agreement and shall continue for a period of five (5) years
(the "Employment Period"), subject to the termination provisions set forth in
Section 8. If, at least one hundred and eighty (180) days before the expiration
of any Employment Period, the Company gives Executive a written offer to extend
the Employment Period for a subsequent term of at least two (2) years following
the end of such Employment Period on substantially the same terms and on
economic terms not less favorable to Executive than those set forth herein and
Executive does not accept such offer in writing within thirty (30) days after
delivery of such offer, then the expiration of such Employment Period shall
constitute termination without Good Reason by Executive for purposes of this
Agreement. If, at least one hundred and eighty (180) days before the expiration
of any Employment Period, the Company does not give Executive a written offer to
extend the Employment Period for a subsequent term of at least two (2) years
following the end of such Employment Period on substantially the same terms and
on economic terms not less favorable to Executive than those set forth herein,
then the expiration of such Employment Period shall constitute termination by
the Company without Cause for purposes of this Agreement.
3. Offices and Duties. Subject to Section 8, during the Employment Period,
Executive will perform such duties as the Board of Directors of the Company
("Board") may prescribe from time to time, consistent with Executive's titles.
Executive agrees that during the Employment Period, he will devote substantially
all of his business time and attention to fulfilling his duties under this
Agreement. Notwithstanding the foregoing, nothing in this Agreement shall
preclude Employee from devoting reasonable periods of time and effort to (i)
charitable, community and personal activities, (ii) management of his personal
investment assets, and (iii) with the approval of the Board of Directors of the
Company, serving as a director or advisor of any other business entity;
provided, however, that in each case, such activity does not interfere in any
material respect with the performance by Employee of his duties hereunder, and
does not violate Section 6 hereof.
4. Board Representation. As of the date hereof, Executive is a member of Class I
of the Board, the term of which runs until the 2002 annual meeting of
stockholders. During the Employment Period, the Company shall recommend
Executive for nomination by the Board for election at the 2002 annual meeting of
stockholders and each subsequent annual meeting of stockholders during the
Employment Period at which his term on the Board would otherwise expire.
5. Compensation.
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5.1 Base Salary. During the Employment Period, the Company
will pay Executive a base salary at a rate (the "Base Salary Rate") of
$345,000 per annum, payable in accordance with the Company's normal
payroll practices for executive officers. The Compensation Committee of
the Board ("Compensation Committee") shall perform an annual review of
Executive's Base Salary based on Executive's performance of his duties
and the Company's normal practice for executive salary review; provided
that, in no event shall Executive's Base Salary for any year be less
than $345,000. The first annual review of Executive's Base Salary shall
occur no later than August 31, 2000, and any increase in Base Salary
awarded during that annual review shall be effective July 1, 2000.
Subsequent annual reviews shall be completed within sixty (60) days
after the end of the Company's fiscal year and any increases in Base
Salary shall be effective January 1 and paid retroactive to that date.
5.2 Bonus Payments. Executive shall be eligible to receive an
annual bonus ("Bonus Payments"), in an amount to be determined by the
Compensation Committee, in its sole discretion, based upon Executive's
and the Company's performance and the achievement of goals and
objectives approved by the Compensation Committee. The performance
criteria to be used with respect to the calendar year ending on
December 31, 2000 is attached hereto as Exhibit A (the "2000 Matrix"),
and the criteria for the Bonus Payments for which Executive shall be
eligible in future years shall be on substantially the same terms and
on no less favorable economic terms than would be received using the
2000 Matrix. Bonus payments shall be made to Executive within sixty
(60) days after the end of the Company's fiscal year. Performance
criteria for subsequent fiscal years will be determined on or before
the later of the sixtieth day after the end of the previous fiscal year
or thirty days after a reasonable proposal is presented by management
with respect thereto.
5.3 Stock Options. Executive shall be eligible to receive an
annual grant of options to purchase the Company's common stock, in an
amount to be determined by the Compensation Committee, in its sole
discretion, based upon Executive's and the Company's performance and
the achievement of goals and objectives approved by the Compensation
Committee. Stock options shall be awarded to Executive within sixty
days after the end of the Company's fiscal year or prior to the
Company's annual earnings release, whichever occurs first.
5.4 Automobile Allowance. During the Employment Period, the
Company shall provide Executive with a monthly automobile allowance of
$1,706 (the "Automobile Allowance").
5.5 Transaction Bonus. If a Change in Control occurs within
the five (5) year period commencing on the date of this Agreement (the
"Scheduled Term"), the Company (or its successor or assigns) shall pay
to Executive a transaction bonus of $1,000,000, payable in cash within
fifteen (15) business days following the effective date of the Change
in Control, regardless of whether Executive remains employed by the
Company as of such effective date or any time prior thereto. This
provision shall survive any termination of this Agreement.
5.6 Benefits. Executive will be entitled to participate in
group life and medical insurance plans, profit-sharing and similar
plans, and other "fringe benefits" which are currently offered or may
be offered in the future by the Company (collectively, "Benefits"), a
summary description of which is attached here to as Exhibit B,
comparable to those made available by the Company to its other senior
executive employees, in accordance with the terms of such plans.
5.7 Debt Forgiveness. So long as Executive remains employed by
the Company, 20% of the original principal amount of Executive's
current indebtedness to the Company of $100,000, plus all accrued but
unpaid interest thereon will be forgiven by the Company as of April 1
of each year.
5.8 Vacation. Executive shall be entitled to take a minimum of
four (4) weeks of vacation, with pay, during each full or partial
calendar year during the Employment Period, unless Company policy
provides for more vacation. Vacation allowances shall not be
accumulated from year to year.
5.9 Withholding. All compensation payable to Executive under
this Agreement is stated in gross amount and will be subject to all
applicable withholding taxes, other normal payroll deductions, and any
other amounts required by law to be withheld.
5.10 Expenses. The Company, in accordance with its policies
and past practices, will pay or reimburse Executive for all expenses
(including travel and entertainment expenses) reasonably incurred by
Executive during the Employment Period in connection with the
performance of Executive's duties under this Agreement, so long as
Executive provides the Company reasonable documentation or evidence of
the expenses for which Executive seeks reimbursement.
6. Covenant Not to Compete.
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6.1 Executive's Acknowledgment. Executive agrees and
acknowledges that in order to assure the Company that it will retain
its value and that of the Business as a going concern, it is necessary
that Executive undertake not to utilize his special knowledge of the
Business and his relationships with customers and suppliers to compete
with the Company. Executive further acknowledges that:
(a) the Company is currently engaged in the Business;
(b) Executive has occupied a position of trust and confidence with the
Company prior to the date of this Agreement and will continue to
acquire an intimate knowledge of all proprietary and confidential
information concerning the Business;
(c) the agreements and covenants contained in this Section 6 are essential
to protect the Company and the goodwill of the Business;
(d) the Company would be irreparably damaged if Executive were to provide
services to any person or entity in violation of the provisions of this
Agreement;
(e) the scope and duration of the Restrictive Covenants are reasonably
designed to protect a protectible interest of the Company and are not
excessive in light of the circumstances; and
(f) Executive has a means to support himself and his dependents other than
by engaging in the Business, or a business similar to the Business, and
the provisions of this Section 6 will not impair such ability.
6.2 Non-Compete. The "Restricted Period" for purposes of this
Agreement shall commence on the date of this Agreement and shall
continue until the later of April 1, 2005 or the one year anniversary
of the termination of this Agreement; provided that, if Executive's
employment with the Company is terminated by Executive for Good Reason
or by the Company without Cause, or by Executive without Good Reason
after January 1, 2002 or upon a Change in Control, then the payments to
which Executive is entitled under Section 9.1 or 9.2, as the case may
be, shall continue to be paid to Executive during the Restricted Period
in consideration for the survival of the Restricted Period beyond the
Effective Date. Following a Change in Control, at the end of the
Restricted Period the Company may extend the Restricted Period for up
to 24 additional months by continuing to pay Executive one-half of his
most recent Base Salary. Executive hereby agrees that at all times
during the Restricted Period, Executive shall not, directly or
indirectly, as executive, agent, consultant, stockholder, director,
co-partner or in any other individual or representative capacity, own,
operate, manage, control, engage in, invest in or participate in any
manner in, act as a consultant or advisor to, render services for
(alone or in association with any person, firm, corporation or entity),
or otherwise assist any person or entity that engages in or owns,
invests in, operates, manages or controls any venture or enterprise
that directly or indirectly engages or proposes to engage in the
Business anywhere within the United States and Canada (the
"Territory").
6.3 Non-Solicitation. Without limiting the generality of the
provisions of Section 6.2 above, Executive hereby agrees that, during
the Restricted Period, Executive will not, directly or indirectly,
solicit, or participate as executive, agent, consultant, stockholder,
director, partner or in any other individual or representative capacity
in any business which solicits, business from any Person which is or
was a customer or vendor of the Business during the Restricted Period,
or from any successor in interest to any such Person, for the purpose
of marketing, selling or providing any such Person any services or
products offered by or available from the Company, or encouraging any
such Person to terminate or otherwise alter his, her or its
relationship with the Company.
6.4 Interference with Employee Relationships. During the
Restricted Period, Executive shall not, directly or indirectly, as
executive, agent, consultant, stockholder, director, co-partner or in
any other individual or representative capacity, without the prior
written consent of the Company, employ or engage, recruit or solicit
for employment or engagement, any individual who is employed or engaged
by the Company at that time, or has been employed or engaged by the
Company during the six (6) months prior thereto, or otherwise seek to
influence or alter any such individual's relationship with the Company.
6.5 Blue-Pencil. If any court of competent jurisdiction shall
at any time deem the term of this Agreement or any particular
Restrictive Covenant too lengthy or the Territory too extensive, the
other provisions of this Section 6 shall nevertheless stand, and the
Restricted Period shall be deemed to be the longest period permissible
by law under the circumstances and the Territory shall be deemed to
comprise the largest territory permissible by law under the
circumstances. The court in each case shall reduce the Restricted
Period and/or the Territory to permissible duration or size.
6.6 Investment Exception. Notwithstanding the foregoing,
nothing contained in this Section 6 shall be construed to prevent
Executive from investing in the stock of any competing corporation
listed on a national securities exchange or traded in the
over-the-counter market, but only if Executive is not involved in the
business of said corporation and if Executive and his associates (as
such term is defined in Regulation 14(A) promulgated under the
Securities Exchange Act of 1934, as in effect on the date hereof),
collectively, do not own more than an aggregate of two percent (2%) of
the stock of such corporation.
7. Confidential Information. During the term of this Agreement and thereafter,
Executive shall keep secret and retain in strictest confidence, and shall not,
without the prior written consent of the Company, furnish, make available or
disclose to any Person or use for the benefit of himself or any Person, any
Confidential Information, except to the extent reasonably necessary to carry out
Executive's duties and responsibilities to the Company or to the extent required
by law or to comply with the lawful subpoena of any administrative or
governmental body, in which case Executive shall give prompt notice of such
subpoena to Company. As used in this Section 7, "Confidential Information" shall
mean any information relating to the Business or affairs of the Company,
including but not limited to information relating to financial statements,
business plans, forecasts, purchasing plans, customer identities, potential
customers, employees, suppliers, equipment, programs, strategies and
information, analyses, profit margins or other proprietary information used by
the Company in connection with the Business of the Company; provided, however,
that Confidential Information shall not include any information which is in the
public domain or becomes known in the industry through no wrongful act on the
part of Executive. Executive acknowledges that the Confidential Information is
vital, sensitive, confidential and proprietary to the Company.
8. Termination.
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8.1 Without Cause. The Company may terminate Executive's
employment hereunder at any time, without Cause (as defined in Section
10), upon not less than ninety (90) days written notice to Executive.
Upon notice of such termination from the Company, the Company may (i)
require Executive to continue to perform his duties hereunder on the
Company's behalf during such notice period, (ii) limit or impose
reasonable restrictions on Executive's activities during such notice
period as it deems necessary, or (iii) choose any date within the
notice period as the effective date of Executive's termination,
provided, however, that the Company will continue to pay Executive's
Base Salary during such notice period.
8.2 For Cause. The Company may terminate Executive's
employment hereunder at any time for Cause by providing to Executive
written notice of termination stating the grounds for termination for
Cause and such termination shall take effect immediately upon notice of
termination. The decision to terminate Executive's employment for
Cause, to take other action or to take no action in response to such
occurrence shall be in the sole and exclusive discretion of the Board.
8.3 By Executive. Executive may terminate his employment
hereunder at any time, with or without Good Reason (as defined in
Section 10), upon not less than ninety (90) days notice (thirty (30)
days notice if Executive terminates following a Change in Control) to
the Company. Upon notice of such termination from Executive, the
Company may (i) require Executive to continue to perform his duties
hereunder on the Company's behalf during such notice period, (ii) limit
or impose reasonable restrictions on Executive's activities during such
notice period as it deems necessary, or (iii) accept Executive's notice
of termination as Executive's resignation from the Company (including a
resignation from any position as director of the Company) at any time
during such notice period. If the Company at any time during the notice
period chooses to accept Executive's notice of termination as
Executive's resignation from the Company, then the effective date of
such termination shall be the date as of which such resignation is
accepted, provided, however, that the Company will continue to pay
Executive's Base Salary during such notice period.
8.4 Death or Disability. The Employment Period will terminate
immediately upon the death or Disability of Executive.
8.5 Salary and Benefit Accruals. Following the effective date
of termination by Executive without Good Reason or by the Company for
Cause, Executive will not be entitled to receive any further
compensation (whether in the form of Base Salary, Bonus Payments, or
Benefits or otherwise) other than those payments set forth in Section
9.2 below and accrued but unpaid Base Salary through the Effective
Date. Upon termination by the Company without Cause, termination by
Executive for Good Reason, death or Disability, Executive (or his
estate) will be entitled to receive (i) all accrued but unpaid Base
Salary through the Effective Date, (ii) Bonus Payment for the year in
which such termination occurs, determined by multiplying the prior
year's Bonus Payment by a fraction equal to the number of days elapsed
in the current year through the effective date of termination (the
"Effective Date") divided by 365, and (iii) any amounts payable
pursuant to Section 9.1 below, but all other obligations of the Company
to pay Executive any further compensation, whether in the form of Base
Salary, Bonus Payments, or Benefits (other than death and Disability
benefits, if any) or otherwise, will terminate.
9. Additional Obligations Upon Termination.
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9.1 Termination Without Cause. If Executive's employment with
the Company is terminated at any time during the Employment Period (i)
by the Company without Cause, or (ii) by Executive for Good Reason, or
(iii) due to the death or Disability of Executive, then in addition to
the amounts payable in accordance with Section 8.5 above, and in
consideration for the Restrictive Covenants, the Company shall pay and
provide to Executive the following:
(a) Within thirty (30) days after the Effective Date,
the Company shall pay to Executive or his estate, a lump sum
cash payment, in an amount equal to the Termination Payment;
(b) for the remainder of the Scheduled Term, (i)
Executive and his dependents shall continue to be covered by
all survivor rights, insurance and benefit programs in type and
amount at least equivalent to those provided to him and his
dependents by the Company immediately prior to the Effective
Date, and (ii) Executive shall continue to receive from the
Company the Automobile Allowance set forth in Section 5.4
above;
(c) any stock options then held by Executive or his
permitted assignees shall immediately vest as of the Effective
Date; and
(d) the Company, at its sole expense, shall provide
Executive with outplacement services consistent with those
services customarily provided by the Company to its senior
executive employees.
9.2 Termination by Executive.
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(a) If, in the absence of a Change in Control,
Executive terminates without Good Reason after January 1,
2002, then, in consideration for the survival of the
Restricted Period beyond the Effective Date, in addition to
the amounts payable in accordance with Section 8.5 above, the
Company shall pay and provide to Executive: (i) an annual
amount during the balance of the Scheduled Term equal to
one-half of Executive's highest total compensation (consisting
of Base Salary and Bonus Payment) in any of the five (5) years
prior to the year in which the Effective Date occurs, payable
in accordance with the Company's normal payroll practices, and
(ii) all Benefits specified under Section 9.1(b) above. For
purposes of providing Executive Benefits under Section 9.1(b),
Benefits shall be equivalent to those provided to Executive
and his dependents immediately prior to the Effective Date;
provided that, if participation in any one or more of such
arrangements is not possible under the terms thereof, the
Company will provide substantially identical Benefits outside
of the programs and cost of this coverage shall be paid by the
Company.
(b) If, after the twelve (12) month period following
a Change in Control, Executive terminates his employment with
the Company without Good Reason, then in addition to the
amounts payable in accordance with Section 8.5 above, within
five (5) business days after the Effective Date, the Company
shall pay and provide to Executive: (i) a lump sum cash
payment, in an amount equal to (x) one-half of Executive's
highest total compensation (consisting of Base Salary and
Bonus Payment) in any of the five (5) years prior to the year
in which the Effective Date occurs, multiplied by (y) the
number of years remaining in the Scheduled Term, and (ii) all
Benefits specified under Sections 9.1(b), 9.1(c) and 9.1(d)
above. For purposes of providing Executive Benefits under
Section 9.1(b), Benefits shall be equivalent to those provided
to Executive and his dependents immediately prior to the
Change in Control; provided that, if participation in any one
or more of such arrangements is not possible under the terms
thereof, the Company will provide substantially identical
Benefits outside of the programs and cost of this coverage
shall be paid by the Company.
9.3 No Mitigation. Executive shall not be required to mitigate
damages or the amount of any payment provided for or referred to in
this Section 9 by seeking other employment or otherwise, nor shall the
amount of any payment provided for or referred to in this Section 9 be
reduced by any compensation earned by the Executive as the result of
employment by another employer after the termination of the Executive's
employment, or otherwise.
9.4 Release. As a condition to Executive's right to receive
any severance payments and Benefits made hereto in this Section 9, the
Company shall require that (i) Executive execute and deliver to the
Company a general release, whereby Executive shall release the Company,
it successor, assigns, officers, directors and agents from any and all
claims, liabilities and obligations relating to or arising out of this
Agreement or any employment-related claims Executive may have after a
Change in Control, including but not limited to claims brought under
the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991,
the Age Discrimination in Employment Act, the Employee Retirement
Income Security Act, the Americans with Disabilities Act, any other
federal, state or local laws regarding employment discrimination or
termination of employment and the common law of any state relating to
employment contracts, wrongful discharge, defamation, or any other
matter arising under common law, and (ii) Executive shall not be in
breach of any Restrictive Covenant.
9.5 Termination in Anticipation of a Change in Control. If the
Company terminates Executive's employment without Cause during the
period commencing six (6) months prior to the earlier of (i) public
announcement by the Company of a Change in Control, or (ii) the
execution by the Company of a definitive agreement with regard to a
Change in Control, and ending on (and including) the date of the Change
in Control, such termination shall be regarded as a termination after
such Change in Control for purposes of this Agreement, including
without limitation, for purposes of Sections 5.5 and 9.
10. Definitions. As used in this Agreement:
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"Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company including, without limitation, any member of an affiliated group of
which the Company is a common parent corporation as provided in Section 1504 of
the Code.
"Anixter Family" means Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, their spouses, heirs and any group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), of which any of the foregoing persons is a member for purposes of
acquiring, holding or disposing of securities of the Company, any trust
established by or for the benefit of any of the foregoing and any other entity
controlled by or for the benefit of any of the foregoing.
"Cause" means (a) an act of fraud or dishonesty by Executive that
results in material gain or personal enrichment of Executive at the Company's
expense, (b) Executive's conviction of a felony-class crime (other than relating
to the operation of a motor vehicle), (c) any material breach by Executive of
any provision of this Agreement that, if curable, has not been cured by
Executive within thirty days of written notice of such breach from the Company,
(d) Executive willfully engaging in gross misconduct materially injurious to the
Company that, if curable, has not been cured by Executive within thirty days of
written notice specifying the alleged willful gross misconduct and material
injury, or (e) any intentional act or gross negligence on the part of Executive
that has a material, detrimental effect on the reputation or Business of the
Company. The decision to terminate Executive's employment for Cause, to take
other action or to take no action in response to such occurrence shall be in the
sole and exclusive discretion of the Board.
"Change in Control" means the happening of any of the following events:
(a) An acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not
constitute a Change in Control: (A) any acquisition by the Company or
by an employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate, (B) any acquisition by a member or
members of the Anixter Family, (C) any acquisition by a lender to the
Company pursuant to a debt restructuring of the Company, (D) any
acquisition by, or consummation of a Corporate Transaction with an
Affiliate, (E) a Non-Control Transaction, or (F) an acquisition by a
Person of the beneficial ownership of twenty percent (20%) or more, but
less than fifty percent (50%) of the combined voting power of the then
Outstanding Company Voting Securities unless Executive's employment is
terminated by the Company without Cause or by Executive for Good
Reason, within twenty-four (24) months following such acquisition;
(b) A change in the composition of the Board such that the
individuals who, as of the date hereof, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, for purposes of this Section 10(b), that any
individual who becomes a member of the Board subsequent to the date
hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of
the Incumbent Board (or deemed to be such pursuant to this provision)
shall be considered as though such individual were a member of the
Incumbent Board; but, provided, further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of
the Incumbent Board;
(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Company (a "Corporate Transaction"), in each case, unless the
Corporate Transaction is a Non-Control Transaction; or
(d) Approval by stockholders of the Company of a complete
liquidation or dissolution of the Company.
"Disability" will be deemed to have occurred whenever Executive has
suffered physical or mental illness, injury, or infirmity that renders Executive
unable to perform the essential functions of his job with or without reasonable
accommodation, except that, prior to Change in Control, said Disability shall
not be grounds for termination of this Agreement in violation of the Americans
with Disabilities Act, Family Leave Act or any other state or federal law
governing the obligations of employers to persons having disability.
"Good Reason" means the occurrence of any of the following events,
unless (i) such event occurs with Executive's express prior written consent,
(ii) the event is an isolated, insubstantial or inadvertent action or failure to
act which was not in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by Executive, or (iii) the event occurs in
connection with termination of Executive's employment for Cause, Disability or
death:
(a) the assignment to Executive by the Company of any duties which are, in
any material respect, inconsistent with, a diminution of or an adverse
change in Executive's position, duty, title, office, responsibility or
status with the Company, including without limitation, any material
diminution of Executive's position or responsibility in the decision or
management processes of the Company, reporting relationships, job
description, duties, responsibilities, or any removal of Executive
from, or any failure to reelect Executive to, such position or failure
of Executive to be reelected to the Board of Directors;
(b) a reduction by the Company in Executive's rate of Base Salary then in
effect during the Employment Period;
(c) any failure to either continue in effect any material Benefits or to
substitute and continue other plans, policies, programs or arrangements
providing Executive with substantially similar Benefits, or the taking
of any action which would substantially and adversely affect
Executive's participation in or materially reduce Executive's Benefits
or compensation;
(d) any failure by any successor or assignee of the Company to continue
this Agreement in full force and effect or any breach of this Agreement
by the Company (or any successor or assignee of the Company), unless
such breach is cured within thirty (30) days of receiving written
notice of the breach from Executive; or
(e) following a Change in Control, the relocation of the executive offices
of the Company to a location that is more than fifty (50) miles from
the executive offices of the Company as of the effective date of such
Change in Control.
"Non-Control Transaction" means a Corporate Transaction as a result of
which the Outstanding Company Voting Securities immediately prior to such
Corporate Transaction would entitle the holders thereof immediately prior to
such Corporate Transaction to exercise, directly or indirectly, more than fifty
percent (50%) of the combined voting power of all of the shares of capital stock
entitled to vote generally in election of directors of the corporation resulting
from such Corporate Transaction immediately after such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries).
"Person" means any individual, corporation, trust, proprietorship,
association, governmental body, agency or subdivision or other entity.
"Termination Payment" means an amount equal to (i) two-thirds of
Executive's highest total compensation (consisting of Base Salary and Bonus
Payment) in any of the five(5) years prior to the year in which the Effective
Date occurs, multiplied by (ii) the number of years or portions thereof
remaining in the Scheduled Term.
11. Remedies. Executive acknowledges and agrees that the covenants set forth in
Sections 6 and 7 of this Agreement (collectively, the "Restrictive Covenants")
are reasonable and necessary for the protection of the Company's business
interests, that irreparable injury will result to the Company if Executive
breaches any of the terms of the Restrictive Covenants, and that in the event of
Executive's actual or threatened breach of any such Restrictive Covenants, the
Company will have no adequate remedy at law. Executive accordingly agrees that
in the event of any actual or threatened breach by him of any of the Restrictive
Covenants, the Company shall be entitled to immediate temporary injunctive and
other equitable relief, without bond and without the necessity of showing actual
monetary damages, subject to hearing as soon thereafter as possible. Nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach, including
the recovery of any damages which it is able to prove.
12. Miscellaneous.
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(a) Notices. All notices and other communication between the parties
pursuant to this Agreement must be in writing and will be deemed given
when delivered in person, one (1) business day after being dispatched
by a nationally recognized overnight courier service, three (3)
business days after being deposited in the U.S. Mail, registered or
certified mail, return receipt requested, or when sent by facsimile
(with receipt acknowledged and a copy sent for next day delivery by a
nationally recognized overnight courier service), to the Company at the
address or facsimile number of its principal office in the Chicago,
Illinois metropolitan area and to Executive (or his representatives) at
his address or facsimile as shown on the Company's records. Executive
(or his representatives) may change his address or facsimile number for
notice purposes by delivering notice to the Company in accordance with
this Section 12(a). All notices sent to the Company shall also be
delivered to Xxxxxx Xxxxxx Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxxx X. Xxxx, Esq.,
Facsimile No.: 312-902-1061.
(b) Governing Law. This Agreement will be subject to and governed by the
laws of the State of Illinois, without regard to principles of
conflicts of laws.
(c) Binding Effect. This Agreement will be binding upon and inure to the
benefit of the parties and their respective heirs, legal
representatives, executors, administrators, successors, and assigns,
subject to the limitations on assignment in Section 12(h).
(d) Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter of this
Agreement and supersedes any other agreements, whether oral or written,
between the parties with respect to the subject matter of this
Agreement.
(e) Modification. No change or modification of this Agreement will be valid
unless it is in writing and signed by both of the parties. No waiver of
any provision of this Agreement will be valid unless in writing and
signed by the person or party to be charged.
(f) Severability. If any provision of this Agreement is, for any reason,
invalid or unenforceable, the remaining provisions of this Agreement
will nevertheless be valid and enforceable and will remain in full
force and effect. Any provision of this Agreement that is held invalid
or unenforceable by a court of competent jurisdiction will be deemed
modified to the extent necessary to make it valid and enforceable and
as so modified will remain in full force and effect.
(g) Headings. The headings in this Agreement are inserted for convenience
only and are not to be considered in the interpretation of construction
of the provisions of this Agreement.
(h) Assignability. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that the
Company may assign its rights to, and cause its obligations under this
Agreement to be assumed by, any person or entity to whom or to which
the Company simultaneously transfers by sale, merger, or otherwise all
or substantially all of its assets.
(i) No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by Executive and the Company to
express their mutual intent, and no rule of strict construction will be
applied against Executive or the Company.
(j) Arbitration. Except for any claim or dispute which gives rise or could
give rise to equitable relief under this Agreement, at the request of
Executive, or the Company, any disagreement, dispute, controversy or
claim arising out of or relating to this Agreement or the breach hereof
shall be settled exclusively and finally by arbitration. The
arbitration shall be conducted in accordance with such rules and before
such arbitrator as the parties shall agree and if they fail to so agree
within fifteen (15) days after demand for arbitration, such arbitration
shall be conducted in accordance with the Federal Arbitration Act and
the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association which are then in effect (hereinafter
referred to as "AAA Rules"). Such arbitration shall be conducted in
Chicago, Illinois, or in such other city as the parties to the dispute
may designate by mutual consent. The arbitral tribunal shall consist of
three arbitrators (or such lesser number as may be agreed upon by the
parties) selected according to the procedure set forth in the AAA Rules
in effect on the date hereof and the arbitrators shall be empowered to
order any remedy which is appropriate to the proceedings and issues
presented to them. Any party to a decision rendered in such arbitration
proceedings may seek an order enforcing the same by any court having
jurisdiction.
(k) Legal Expenses. The Company shall pay the legal expenses incurred by
Executive for review of this Agreement by his legal counsel, up to an
amount not to exceed $10,000. If Executive takes legal action to
enforce the Company's obligations under this Agreement and Executive
prevails in such action to any significant extent, the Company shall
reimburse Executive for all reasonable expenses (including reasonable
attorney's fees) actually incurred by Executive in such action.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement as of the date first above written.
ANICOM, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Chairman of the Board
EXECUTIVE:
/s/ Xxxx X. Xxxxxx
--------------------
Xxxx X. Xxxxxx
