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Exhibit 2(v)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into this 24 day of
Oct., 1996, by and between Xxxxxxx Xxxxx, Xx., residing at Toledo, Ohio
("Employee"), and United Magazine Company, an Ohio corporation.
BACKGROUND INFORMATION
A. United Magazine Company is engaged, directly and through its
subsidiaries, in the business of the wholesale distribution of books, magazines
and other periodicals (the "Business"). United Magazine Company and its
subsidiaries are hereinafter referred to collectively as the "Company."
B. Employee desires to enter into the employment of the Company to serve in
a management capacity and to perform such duties as they may be assigned to him
from time to time by the Board of Directors of the Company (the "Board").
C. The Company desires to employ Employee to serve in a management capacity
and to perform such appropriate duties as may be assigned to him from time to
time by the Board in accordance with the terms and provisions set forth herein.
PROVISION
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and provisions set forth herein, it is agreed as follows:
1. EMPLOYMENT CAPACITY AND DUTIES. During the term of this Agreement,
Employee shall serve the Company in a management capacity, and shall be
responsible for performing such appropriate duties as the Board may from time to
time assign to him. Initially, Employee shall serve as President of The Xxxxx
Division of the Company, or such other position within the Company as may be
equivalent to division president, and his duties shall be consistent with those
duties and responsibilities customarily assigned to such position. Throughout
the term of this Agreement any substantially additional or different duties or
responsibilities assigned to Employee shall be those normally associated with
growth and promotion of an executive within the Company. Employee shall devote
his full time, skill, labor and attention to the affairs and business of the
Company. Employee shall not actively engage in or devote any of his time and
attention to any business other than the Company's, except as a passive,
non-participating investor in such businesses, provided however, that Employee
may maintain his current positions with those various companies not in
competition, directly or indirectly, with the wholesale periodical distribution
business of the Company.
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In assigning duties to Employee under this Agreement, the Company shall not
require Employee to move his primary residence from the Toledo area, although it
is anticipated that a significant amount of travel will be required of Employee.
2. COMPENSATION. During the term of this Agreement and while employed by
the Company, Employee's compensation shall be as follows:
(a) BASE SALARY. Subject to the terms and conditions contained herein,
Employee shall receive an annual base compensation, which shall be payable
on a weekly basis, in the following amounts ("Base Salary"):
First Year: $160,000.00
Second Year: The same base salary as the prior year plus the Company's
standard cost of living increase.
Third Year: The same base salary as the immediately prior year plus
the Company's standard cost of living increase.
(b) BONUS. Employee shall receive gross bonus in the amount of
$25,000.00 provided that all of the Company's Michigan operations are
successfully consolidated within budget by December 31, 1996. This bonus
shall be payable within twelve months (12) from the date of Escrow Closing
as defined in the Stock Transfer and Exchange Agreement, dated August 1,
1996, between the Company and The Xxxxx Companies and its shareholders. At
the end of the second year of this Agreement, Employee shall receive a
gross annual bonus of $25,000.00 if all Michigan and Indiana operations of
the Company have performed within budget during the immediately preceding
year, such amount to be payable within 45 days after the close of the
twelve month period. At the end of the third year of this Agreement,
Employee shall receive a gross annual bonus of $25,000.00 after a mutually
agreed upon Company goal has been achieved. The goal shall be determined by
the Company thirty days prior to the commencement of the third year of the
term.
3. OTHER BENEFITS.
(a) Employee shall be entitled to such rights, benefits and
privileges, including group medical and life insurance, pension or other
fringe benefits or compensation programs, as the Company may from time to
time adopt for management employees generally. Notwithstanding the
foregoing, the minimum benefit package provided to Employee shall be that
described in Exhibit A attached hereto.
(b) Employee shall be entitled to the exclusive use of an automobile
equivalent to that previously provided to Employee by his former company.
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(c) Employee shall be entitled to a vacation of four (4) weeks
annually. During such periods, his compensation shall be paid in full.
(d) The Company shall provide an Executive Life Insurance policy.
(e) The Company will provide a 401(k) plan with Company match of
Employee's contributions or in accordance with the Company's policy if its
current 401(k) plan changes.
4. EXPENSES. The Company shall pay or reimburse Employee for all
disbursements or expenses reasonably incurred by him during the term of this
Agreement in connection with the performance of his duties under this Agreement.
Such reimbursement shall be made upon the presentation of expense vouchers or
reports in accordance with the standard procedures of the Company with respect
to expense items.
5. WORKING FACILITIES. The Company shall provide Employee with such
facilities, supplies, and services as are reasonably suitable to the position
within the Company and which Employee and the Company reasonably agree are
necessary for Employee to perform his duties hereunder.
6. TERM. This Agreement shall commence on the effective date of this
Agreement and shall continue for a period of three (3) years, unless earlier
terminated as provided herein.
7. TERMINATION OF EMPLOYMENT FOR CAUSE. This Agreement and Employee's
employment hereunder may be terminated by the Company, effective immediately
upon notice to Employee (or at such later date as may be specified in the notice
of termination), upon the occurrence of any of the following, as determined by a
vote of a majority of the Board:
(a) Sickness or injury of Employee which results in Employee being
unable to perform substantially all of his duties hereunder for a period of
six (6) consecutive months;
(b) Employee engages in, undertakes or is a party to or involved in,
any one of the following acts or events:
(i) Any act of fraud or material conflict of interest or
self-dealing involving the Company; or
(ii) Any felony or any offense involving moral turpitude or any
criminal offense involving the Company; or
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(iii) A violation or breach of any of Employee's covenants under
Section 9 of this Agreement; or
(c) Employee engages in misconduct or neglect of duty or in any
willful action which materially and adversely affects the business, affairs
or goodwill of the Company; or
(d) Repeated failure to follow reasonable written policies, procedures
or practices established by the Company, and failure to conform Employee's
actions to such policies, procedures or practices within thirty (30) days
after notice from the Company.
In addition, Employee's employment hereunder shall terminate automatically
upon the death of Employee, or the incompetency of Employee, as determined by a
court of competent jurisdiction.
In the event of termination of Employee's employment pursuant to this
Section 7, Employee shall be entitled to all compensation, benefits and expense
reimbursements payable through the date of termination, and to no further
compensation. If Employee disagrees with a determination by the Board with
respect to the existence of conditions supporting the Company's termination of
this Agreement pursuant to this Section 7, Employee may, within thirty (30) days
of his receipt of notice of termination from the Company, file a demand for
arbitration with respect to the issue of whether such conditions existed in the
City of Columbus, Ohio, in accordance with the rules then prevailing of the
American Arbitration Association, by a panel of three (3) arbitrators, and
judgment upon the award rendered by the arbitrators may be entered in a court of
competent jurisdiction.
8 . TERMINATION OF EMPLOYMENT WITHOUT CAUSE. In the event the Company
terminates Employee's employment during the term of this Agreement other than as
permitted by Section 7 hereof, Employee shall be entitled to continuation of
salary and benefits under this Agreement for the remainder of the term of this
Agreement and shall be entitled to no other recovery or damages related to such
termination whether under contract, tort or otherwise.
9. COVENANTS OF EMPLOYEE.
(a) REASONS FOR COVENANTS. Employee, during the term of his
employment, will have access to and will become familiar with, various
trade secrets, confidential and proprietary information, data, plans and
know-how of the Company, heretofore known only to the Company, its
employees, agents and contractors. These trade secrets and confidential and
proprietary information, including, without limitation, information
relating to the Company's operations or the financial condition or results
of its operations, its marketing or business
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strategies and plans, the names, addresses, case histories or plans of any
of its customers or prospective customers, its operating procedures or
plans, its advertising methods or plans, the names, addresses, training,
background or other information regarding any person who is or was an
employee of the Company, and other compilations of information which are
owned by the Company and which are regularly used in the operation of the
business of the Company ("Confidential Information"), are and will be the
result of large amounts of time, effort and expense of the Company in
developing such information and in recruiting and training such employees
and are essential to the success of the Company. Confidential Information
shall be maintained by Employee on a confidential basis, and Employee shall
not interfere with the employment relationships between the Company and its
employees, agents, customers, suppliers and other contractors by inducing
any of those employees, agents, customers, suppliers or other contractors
to terminate their employment or other relationships with the Company.
(b) COVENANT OF NON-DISCLOSURE. With respect to any Confidential
Information received by Employee, until such time, if any, as such
Confidential Information becomes generally known to the public (other than
as a result of disclosure by Employee), Employee shall:
(i) Not use such Confidential Information for his own purposes
other than in connection with his regular activities for or on behalf
of the Company, and shall refrain from using, disclosing,
disseminating or publishing to or with any person, firm, company or
entity, or making available to any others for any use other than for
or on behalf of the Company, such Confidential Information, directly
or indirectly, during his employment or after termination thereof; and
(ii) Restrict disclosure of such Confidential Information only to
others as may reasonably be necessary in the conduct of the Company's
business; and
(iii) Advise all such persons of the strict obligations of
confidentiality hereunder; and
(iv) Take such steps to protect the confidentiality of
Confidential Information as are necessary to keep it confidential.
Provided, however, that Employee shall not be precluded from
utilizing or disclosing any information regarding the Company which
(i) is generally available to the public; (ii) is lawfully obtained by
the Employee from a source other than the Company; (iii) is required
to be disclosed by or in any judicial or administrative process,
proceeding or investigation or
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by applicable law; or (iv) is generally known in the industry in which
the Company conducts its business.
(c) COVENANT OF NON-SOLICITATION. Employee shall not, directly or
indirectly, at any time during his employment with the Company and for a
period of two (2) years after termination of such employment:
(i) Solicit or attempt to solicit any employee, customer, agent,
supplier or contractor of the Company to leave the employment of the
Company or terminate its relationship with the Company; or
(ii) Assist or attempt to assist any person, firm or Company in
any way to solicit any employee, customer, agent, supplier or
contractor of the Company to leave the employment of the Company or
terminate its relationship with the Company.
(d) TERMINATION OF EMPLOYMENT. At such time as the employment
relationship between Employee and the Company has terminated, Employee
shall:
(i) Promptly return to the Company, or at the Company's option,
destroy, all Confidential Information, including all copies of
documents, notes or materials made by Employee or at his direction,
and promptly return to the Company all company property, including
keys and automobiles; and
(ii) Certify in writing to the Company that he has so complied;
and
(iii) Not use Confidential Information or transact business in a
manner in any way based upon or utilizing Confidential Information.
(e) COVENANT NOT TO COMPETE. Commencing on the effective date of this
Agreement and continuing for a period of five (5) years (or until such
earlier date, if any, as the Company terminates Employee's employment other
than in accordance with Section 7 hereof), Employee shall not, individually
or in concert with any other person or entity, or through a company,
partnership or other entity, own, manage, operate, control, be employed by,
work on behalf of, invest in, assist (financially or otherwise), provide
advisory, consulting or other services for, participate in or be interested
or connected in any manner, with the ownership, management, operation,
promotion or control of, any person, company, partnership, proprietorship
or other business which is engaged, directly or indirectly, in a business
which:
(i) is the same as or similar to the Business or any part
thereof; or
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(ii) is the same as or similar to any business conducted by the
Company during or as of the date of termination of Employee's
employment; or
(iii) sells or provides a Conflicting Product (as hereinafter
defined) in competition with the Company;
and conducts business in any state of the United States of America or in
any foreign country where the Company, at any time during or as of the date
of termination of Employee's employment hereunder, has conducted, currently
conducts, or reasonably expects to conduct its business or any part
thereof.
As used herein, "Conflicting Product" means any product, product line
or service which is similar to any product, product line or service that is
being marketed or sold by the Company at any time during or as of the date
of termination of Employee's employment, or with respect to which the
Company has acquired and disclosed to Employee Confidential Information
which the Company intends to use in the marketing or sale of a product or
service.
Employee shall provide, upon request of the Company at any time, such
information as may reasonably be required by the Company to determine his
compliance with the covenants contained in this Section 9(e). Employee may
at any time advise the Company of the facts surrounding any proposed
acquisition or involvement in any business enterprise and request the
Company's written approval that, based solely upon such facts, such
acquisition or involvement does not violate the covenants contained in this
Section 9(e). Such approval shall not be unreasonably withheld.
(f) SCOPE OF COVENANTS. In the event that any provision of the
covenants contained in this Section 9 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of it being extended
over too great a period of time, too large a geographic area, or too great
a range of activities, it should be interpreted to extend only over the
maximum period of time, geographic area, or range of activities as to which
it may be enforceable.
(g) SPECIFIC PERFORMANCE. A breach by Employee of any of the covenants
contained in this Section 9 may cause irreparable damage to the Company,
the extent of which may be difficult to ascertain, and the award of damages
may not be adequate relief. Consequently, the Company may institute an
action to compel the specific performance of these covenants and Employee
consents to the award of such remedy, which remedy shall be cumulative, not
exclusive, and shall be in addition to any other remedy.
(h) SURVIVAL OF COVENANTS. The covenants contained in this Section 9
shall survive termination of this Agreement.
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10. MISCELLANEOUS.
(a) Except as otherwise expressly provided herein, this Agreement
shall not be changed, modified, terminated, canceled or amended except by a
writing signed by each party to this Agreement.
(b) This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof, and merges and
supersedes all prior discussions, agreements and undertakings of every kind
and nature between them with respect to the subject matter hereof.
(c) The descriptive headings of the Sections and Paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(d) The parties hereto acknowledge and agree that the consideration
for the covenants of Employee stated herein is the entering into of this
Agreement and the performance of the parties' respective obligations.
(e) This Agreement is based upon the personal services of Employee,
and the rights and obligations of Employee shall not be assignable. Nothing
in this Agreement shall prohibit or impair Company's right to assign all or
any part of Company's rights, duties or obligations under this Agreement
pursuant to any merger, consolidation, reorganization, sale of stock, sale
of assets, change of name or similar arrangement involving the Company, and
Employee hereby consents to any such assignment which shall be effective
upon the mailing of written notice thereof to Employee.
(f) To be effective, all notices, requests and demands to or upon the
respective parties hereto shall be in writing or by facsimile transmission
or telex (unless otherwise expressly provided herein), and shall be deemed,
unless otherwise expressly provided herein, to have been duly given or
made, in the case of written notice, upon hand delivery or upon three (3)
business days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, and in the case of
facsimile notice, upon telephone confirmation of transmission, and in the
case of telex notice, when sent, answerback received, addressed as follows
or to such other address as the respective parties hereto may designate in
writing to the other parties pursuant to this provision:
Employee:
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With a copy to:
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The Company: United Magazine Company
0000 Xxxx Xxxx
Xxxxxx, Xxxx
Attn: Chairman
Facsimile No: (000) 000-0000
With a copy to: Xxxxx & Xxxxxxxxx
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No: (000) 000-0000
(g) This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute but one (1) and the same
instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
(h) This Agreement and the rights and obligations of the parties under
this Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Ohio, excluding conflict of law
principles. Any and all actions regarding this Agreement or the
transactions contemplated hereby brought by the Company may, and all such
actions brought by Employee shall, be forumed and venued in Franklin
County, Ohio. Employee hereby consents to the jurisdiction of the courts of
the State of Ohio, in Franklin County, Ohio, and the United States District
Court for the Southern District of Ohio, and their respective appellate
courts, for purposes of enforcement of this Agreement, and waives any
contention that any such court is an improper venue for such enforcement.
(i) Any claim of Employee relating to this Agreement, his employment
hereunder, or termination of his employment, shall be determined by binding
arbitration in the City of Columbus, Ohio, in accordance with the rules
then prevailing of the American Arbitration Association, by a panel of
three (3) arbitrators, and judgment upon the award rendered by the
arbitrators may be entered in a court of competent jurisdiction.
(j) The invalidity of any provision or provisions of this Agreement
shall not affect the other provisions, and this Agreement shall be
construed in all respects as if any invalid provisions were omitted.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
UNITED MAGAZINE COMPANY,
an Ohio corporation
/s/ Xxxx Xxxxxx Xxxxx /s/ Xxxxxx X. Xxxxxxx
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Witness By: Xxxxxx X. Xxxxxxx
Its: Chairman
/s/ Xxxxx X. Xxxxxxxx
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Witness EMPLOYEE
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx Xxxxx, Xx.
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Witness Xxxxxxx Xxxxx, Xx.
/s/ Xxxxxxx X. Xxxxx
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Witness
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