EXHIBIT 10.28
December 16, 1998
BY TELECOPY
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Xx. Xxxxx Xxxxxxx
0 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Dear Xxxxx:
This agreement will serve to confirm the terms and conditions under which we
will accept your resignation as Senior Vice President, Sales.
1. RESIGNATIONS. Effective December 31, 1998 (hereinafter the "Resignation
Date") you will resign from employment as Senior Vice President, Sales and any
other officerships or directorships of Micro Warehouse, Inc. or any of its
affiliates, sister companies or subsidiaries (hereinafter "the Company").
2. EMPLOYMENT AGREEMENT; PAYMENTS HEREUNDER. (a) Any prior employment agreement
with the Company, whether written or oral and including specifically the letter
agreement between you and the Company dated October 6, 1997, is terminated as of
the Resignation Date.
(b) You shall be entitled to receive your current bi-weekly base salary of
$7,692.31 (after deducting all required withholding and other amounts) until
June 30, 1999. You shall also be eligible to receive the following incentive
compensation:
(i) the actual amount, if any, of your incentive bonus under the Micro
Warehouse Officers and Directors Incentive Bonus Plan ($30,000
target), to be calculated prior to January 31, 1999 and paid on the
date in 1999 that other eligible employees receive their 1998 bonus
under such plan; and
(ii) your quarterly bonus for the fourth quarter 1998 in the amount of
$4,166, which will be paid in a lump sum within two weeks of your
Resignation Date.
(c) Within two weeks of the Resignation Date you will also receive a
one time payment for your accrued and unused 1998 vacation time (after deducting
all required withholding and other amounts).
(d) Upon your request and subject to the receipt of appropriate
documentation, the Company will reimburse you for your actual expenses incurred
in relocation from New Jersey to Massachusetts, including the broker's fee and
closing costs on your home, up to a maximum of $25,000.
(e) You may retain the Company's laptop computer in your possession
having the manufacturer, model and serial number described on the annex hereto,
PROVIDED that you remove all copies of any "confidential or proprietary
information" (as defined in Paragraph 9 below) from the hard drive of the
computer and any disks in your possession and return the same to my attention
within five (5) business days of the date hereof.
3. COBRA BENEFITS. The Company agrees to pay directly your COBRA payments
required to maintain your and your family's current health insurance coverage
through the Company until the earlier of June 30, 1999 or the first date you
become eligible for participation in the medical benefits program of any
subsequent employer (whether or not you elect coverage under such employer's
plan). After that date, all additional available COBRA coverage will be at your
expense. You acknowledge that the Company will have no obligation to pay
directly or reimburse you for any COBRA payments due more than six (6) months
subsequent to the Resignation Date.
4. STOCK OPTIONS. As of the Resignation Date 15,000 of the 60,000 options you
hold shall be accelerated and deemed vested and the remainder shall be deemed
cancelled. In all other respects, said options will continue to be subject to
the terms and conditions of the agreement and or Stock Option Plan under which
they were granted to you. All options retained by you pursuant to this agreement
shall have an exercise price of $15.44 per share and must be exercised on or
before September 30, 1999. You will not be eligible to receive any further stock
options or otherwise participate in any deferred compensation programs
notwithstanding the possibility that the Company might provide the same
participation to other comparably compensated employees.
5. STOCK TRADING RESTRICTIONS. For the period from the date hereof until three
business days after the public release of the Company's 1998 fourth quarter and
full year earnings, you will continue to be subject to and abide by the
Procedures Adopted by the Company to Prevent Xxxxxxx Xxxxxxx (incorporated in
the Xxxxxxx Xxxxxxx Memorandum attached hereto as Exhibit A) and specifically
will be prohibited from initiating a purchase or sale transaction in the
Company's stock except in a "window period."
6. RELEASE. (a) As consideration for the Company to enter into this agreement
and as consideration for the covenants contained herein, subject to the
immediately following sentence, you irrevocably and unconditionally release,
remit, acquit and forever discharge the Company, its officers, directors,
shareholders, agents, employees, representatives, attorneys, parents, divisions,
subsidiaries, affiliates, related companies or entities, successors and assigns
and the officers, executives, directors, shareholders, agents and employees of
any and all of the Company's parents, divisions, subsidiaries, affiliates,
related companies or entities, successors or entities (separately or
collectively, the "Released Parties"), jointly and individually, from any and
all claims, charges, complaints, expenses and causes of action of any nature or
kind whatsoever, known or unknown, which you, your heirs, successors or assigns
have or may have against the Released Parties based upon, related to or arising
out of your employment with the Company through the date hereof, including, but
not limited to, claims, charges, complaints, liabilities, losses, obligations,
demands,
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damages, costs, expenses and causes of action relating to the terms, conditions,
commencement, duration or termination of your employment, or claims of
discrimination under any federal, state or local law, rule, regulation or common
law, whether such claims are past or present, whether they arise from equity,
common law or statute, and whether they arise from labor laws or discrimination
laws, such as the Age Discrimination in Employment Act, as amended, Title VII of
the Civil Rights Act of 1964, 42 U.S.C. ss.1981, the Equal Pay Act, as amended,
the Americans with Disabilities Act, or any other federal, state or local law,
rule or regulation. This release is intended to cover all possible relief,
including, but not limited to, reinstatement, wages, back pay, front pay,
vacation pay, bonuses or incentive compensation, supplemental or other
retirement benefits, perquisites, compensatory damages, punitive damages,
damages for pain or suffering, and attorneys' fees, provided, however, that
nothing in this agreement will limit or otherwise affect any right you may have
to indemnification under the Company's Articles of Incorporation, By Laws or any
insurance policy in effect as of the termination of your employment with the
Company. In addition, if the Company complies with its obligations hereunder,
you agree you will not be entitled to any benefit from any claim or proceeding
filed by you or on your behalf with any agency or court which is within the
scope of this agreement or which goes to the validity of any provision of this
agreement.
(b) The releases under this Paragraph 6 are intended to cover all
possible rights, obligations and liabilities, including any such rights,
obligations or liabilities based upon, relating to or arising from any claim
which goes to the validity of any provision of this agreement, other than a
claim for any breach of this agreement.
(c) You acknowledge that you have been given a period of at least 21
days to review and consider this agreement before signing it, and that you
understand that you may use as much of the 21-day period as you wish prior to
signing. You also acknowledge that you have obtained independent legal counsel
in connection with reviewing this agreement.
7. COVENANT NOT TO COMPETE You hereby covenant and agree that from the date
hereof until June 30, 1999 you shall not, directly or indirectly, own, operate,
manage, join, control, participate in the ownership, management, operation or
control of, or be paid or employed by, or acquire any securities of, or
otherwise become associated with or provide assistance to, as an employee,
consultant, director, officer, shareholder, partner, agent, associate,
principal, representative or in any other capacity, any business entity or
activity which is directly or indirectly a "Competitive Business" (as
hereinafter defined); PROVIDED, HOWEVER, that the foregoing shall not prevent
you from (a) performing services for a Competitive Business if such Competitive
Business is also engaged in other lines of business and if your services are
restricted to employment in such other lines of business; or (b) acquiring the
securities of or an interest in any Competitive Business, provided such
ownership of securities or interests represents at the time of such acquisition,
but including any previously held ownership interests, less than two percent
(2%) of any class or type of securities of, or interest in, such Business. The
term "Competitive Business" shall mean and include any business or activity,
wherever located, that engages in the sale or distribution of computers and
computer-related products, regardless of the format or method of marketing or
order-taking; provided, however, that a "Competitive
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Business" shall not include wholesalers or distributors of computer products
(i.e., entities that do not sell to end-users) or retail stores that specialize
in computer products (E.G., CompUSA, Circuit City).
8. COVENANT NOT TO SOLICIT You hereby covenant and agree that, from the date
hereof until the expiration of eighteen (18) months from the Resignation Date,
you shall not, for or on behalf of any party, directly or indirectly, as owner,
officer, director, stockholder, partner, associate, consultant, manager,
advisor, representative, employee, agent creditor or otherwise, attempt to
solicit for employment any person who has been an employee of the Company at any
time or times during your employment by Company.
9. CONFIDENTIAL INFORMATION. You acknowledge that the Company would be damaged
if your knowledge with respect to the business of the Company was disclosed to
or utilized by parties other than the Company. Accordingly, you covenant and
agree that you will not disclose any presently known or hereafter acquired
confidential or proprietary information of the Company or its business to any
person, firm, corporation or other entity. For the purposes of this paragraph,
the term "confidential or proprietary information" shall mean all information
which is currently known to or hereafter acquired by you and relates to such
matters as budget and forecasts, customer mailing lists, data base management
techniques, pricing and credit techniques, marketing techniques, research and
development activities, sources of product, and other confidential or restricted
information which is not in the public domain. Confidential or proprietary
information shall not be deemed to include information released generally to the
public by the Company or others, information required by law to be disclosed or
information learned by you from third parties without restrictions on disclosure
provided the same would not, if released, damage the Company.
10. ASSIGNMENT. This agreement is not assignable, except that the Company may
assign it to any successor of substantially all of the Company's business or
assets. This agreement will be binding upon, and inure to the benefit of, the
parties and their successors and assigns. Any payments due to you under this
agreement shall be paid to your estate in the event that you should die before
said payments are made.
11. PARTIAL INVALIDITY. If any provision of this agreement is held to be
invalid, void or unenforceable, the remaining provisions shall continue in full
force without being impaired or invalidated in any way.
12. GOVERNING LAW. This agreement will be governed by the laws of the State of
Connecticut, without giving effect to the conflict of laws principles thereof.
Both parties hereby agree to waive the right to a jury trial in the event there
is any legal action arising out of the interpretation or enforcement of this
Agreement.
13. ENTIRE AGREEMENT. This agreement reflects the complete agreement between the
parties with respect to the subject matter hereof, and there are no written or
oral understandings, promises
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or agreements directly or indirectly related to this letter agreement or the
subject matter hereof that are not incorporated herein.
14. REVOCATION PERIOD. For a period of seven (7) calendar days following your
execution of this agreement, you may revoke this agreement. This agreement will
not become effective or enforceable to release any claims or rights which you
may have under the Age Discrimination in Employment Act until this revocation
period has expired. This agreement also will not become effective or enforceable
with respect to any obligations that the Company may have hereunder until this
revocation period has expired. You acknowledge and agree that if the Company
satisfies any obligations hereunder that otherwise would have arisen during this
revocation period as soon as practicable after the revocation period has
expired, such action will constitute timely satisfaction of such obligations
hereunder. You also acknowledge and agree that the benefits to you of the
covenants contained herein, including, but not limited to, payments hereunder,
are provided to you in exchange for the promises in this agreement, are not
normally available under Company policy or practice to employees whose
employment is terminated and provide for the payments of amounts to which you
would not otherwise be entitled.
15. CONFIDENTIALITY AND INTENT TO BE BOUND. The terms and conditions of this
agreement are confidential and must not be disclosed to any person other than
those who must perform tasks to effect the agreement. Notwithstanding the
foregoing, the Company and you may disclose any term of this agreement, after
prior written notice to the other party that disclosure is about to take place,
(i) to any governing authority if disclosure is required to comply with
applicable law; or (ii) to either party's attorneys, accountants, spouse or
advisors with whom a fiduciary relationship has been established. Both parties
have read this agreement, have had the opportunity to consult with counsel,
fully understand the agreement's terms and conditions, and enter this agreement
freely, voluntarily and intending to be legally bound hereby.
16. ENFORCEMENT OF AGREEMENT. You hereby acknowledge and agree that your
obligations under Paragraphs 7, 8 and 9 are a material part of the consideration
for this agreement and for the payments from the Company to you under Paragraph
2; that your failure to satisfy any of such obligations could cause irreparable
harm to the Company and that the damages caused by such failure would be
uncertain and difficult to measure. You further acknowledge and agree that the
Company may seek injunctive relief to prevent your failure or further failure to
satisfy any of such obligations, in addition to all other rights, remedies and
claims that it may have under this agreement, at law or in equity.
17. NO WAIVER. No failure on the part of either party at any time to require the
performance by the other party of any term hereof shall be taken or held to be a
waiver of such term or in any way affect such party's right to enforce such
term, and no waiver on the part of either party of any term hereof shall be
taken or held to be a waiver of any other term hereof or the breach thereof.
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If you agree to and accept the terms and conditions of this agreement,
please sign both copies hereof in the space provided below, retain one copy for
your records and return the other copy to the undersigned.
Very truly yours,
MICRO WAREHOUSE, INC.
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Executive Vice President, Legal and
Corporate Affairs and General Counsel
YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT, UNDERSTAND IT, AND ARE
KNOWINGLY AND VOLUNTARILY ENTERING INTO IT. PLEASE READ AND CONSIDER THIS
AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Date Signed: December 16, 1998
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