EMPLOYMENT AGREEMENT
AGREEMENT dated as of January 28, 1997 by and among Strategic
Distribution, Inc., a Delaware corporation (hereinafter called "SDI"),
INTERMAT Acquisition Corp., a Delaware corporation (hereinafter called the
"Company"), and Xxxxxxx X. Xxxxxxxxx (hereinafter called the "Employee").
EMPLOYMENT. SDI and the Company hereby employ the Employee and the
Employee hereby accepts employment upon the terms and conditions hereinafter
set forth.
2. TERM. The term of this Agreement shall be for a period of
three (3) years commencing on the date hereof, subject to early termination
by SDI or the Company for "Cause". For purposes of this Agreement, the SDI
or Company shall have Cause to terminate the Employee's employment hereunder
upon (a) the Employee having been convicted of any felony or crime involving
moral turpitude (excluding minor traffic violations); (b) the continued and
habitual use of narcotics or alcohol to an extent which materially impairs
the Employee's performance of his duties hereunder; (c) the willful
malfeasance or gross negligence by the Employee in the performance of his
duties hereunder; (d) the knowing violation by the Employee of any material
provision of this Agreement; (e) gross misconduct by the Employee injurious
to SDI or the Company; or (f) the continued failure by the Employee to
perform his duties hereunder. In the event that this Agreement shall be
terminated for Cause, the Company shall continue to make payments hereunder
for all services rendered by the Employee up to the date of termination.
In addition to the foregoing, SDI or the Company may terminate this
Agreement in the event that the Employee becomes ill or is injured so that he
is unable to perform the duties required of him hereunder for a period of 150
days and such inability is continuing on the date the notice referred to in
the next sentence shall be given. SDI or the Company shall give the Employee
thirty (30) days' prior notice of termination pursuant to this paragraph,
such notice to be given upon the expiration of such 150 day period. SDI or
the Company shall continue to make payments hereunder to the Employee during
the 150 day period referred to above, provided that the amount of such
payments shall be reduced by any amounts payable to the Employee under any
group disability program sponsored by the Company.
3. SALARY. For all services rendered by the Employee under this
Agreement (including for all services rendered as the Executive Vice
President of SDI), the Company shall pay the Employee at a salary rate of not
less than $150,000 per year, payable in accordance with the Company's then
current payroll practice.
4. DUTIES. The Employee is engaged as Chairman Emeritus of the
Company and Executive Vice President of SDI and hereby promises to perform
and discharge well and faithfully the duties which may be assigned to him
from time to time by the Board of Directors of the Company and the President
of SDI, which duties shall be commensurate with such positions.
The Employee shall not be required as a condition of employment to
relocate from the City of Houston, Texas.
5. EXTENT OF SERVICES. (a) The Employee shall devote his full
business time, attention and energies to the business of SDI and the Company
or their affiliates and shall not during the term of this Agreement be
engaged in any other substantial business activity, whether or not such
business activity is pursued for gain, profit or other pecuniary advantage;
but this shall not be construed as preventing the Employee from investing his
personal assets in businesses which do not compete with SDI or the Company or
their affiliates in such form or manner as will not require any substantial
services on the part of the Employee in the operation of the affairs of the
companies in which such investments are made and in which his participation
is solely that of an investor and except that the Employee may purchase
securities in any corporation whose securities are regularly traded, provided
that such purchases shall not result in his collectively owning beneficially
at any time more than 5% of any class of securities of any corporation
engaged in a business competitive with that of SDI or the Company. As used
in this Agreement, "affiliate" shall mean any person, firm or corporation
that, directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, SDI or the Company,
whether such control is through stock ownership, contract or otherwise.
(b) The Employee shall maintain an office at his place of residence (the
"Home Office") and may spend such portion of his time working from the Home
Office as may reasonably be determined by the SDI or Company. Subject to
Section 13 hereof, the Employee shall be reimbursed for the reasonable and
necessary expenses associated with operating the Home Office in connection
with the performance of the Employee's duties hereunder.
6. LICENSES. During the term of this Agreement, the Employee
shall keep in full force and effect such appropriate licenses as may be
required to enable him to render services in connection with SDI's and the
Company's businesses as they may exist from time to time; however, the
Company shall reimburse the Employee for all costs incurred by him to
maintain such licenses.
7. COVENANTS NOT TO COMPETE OR INTERFERE. For a period ending on
the later of (a) five (5) years from and after the date hereof or (b) two (2)
years from and after the termination of the Employee's employment hereunder,
the Employee
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will not, directly or indirectly, as a sole proprietor, member of a
partnership, or stockholder, investor, officer or director of a corporation,
or as an employee, agent, associate or consultant of any person, firm or
corporation:
(a) Solicit or accept business (x) from any clients or prospects of
SDI, the Company or their affiliates or (y) from any former client who was
such within the last two (2) years prior to the date of this Agreement, if
the business solicited or accepted is competitive with the business
conducted by SDI, the Company or their affiliates or the solicitation or
acceptance of such business would interfere with the customer relationships
maintained by SDI, the Company or their affiliates; or
(b) Engage in the business of the type performed by SDI, the Company
or their affiliates.
It is the desire and intent of the parties that the provisions of
this paragraph 7 shall be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular portion of this
paragraph 7 shall be adjudicated to be invalid or unenforceable, this
paragraph 7 shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this paragraph in the particular jurisdiction in
which such adjudication is made.
8. DISCLOSURE OF INFORMATION; EMPLOYEE NONDISCLOSURE AGREEMENT.
(a) The Employee recognizes and acknowledges that SDI's and the
Company's (including their affiliates') trade secrets and confidential or
proprietary information, including such trade secrets or information as may
exist from time to time, and information as to the identity of customers of
SDI, the Company and their affiliates and other similar items, are
valuable, special and unique assets of the Company's business, access to
and knowledge of which are essential to the performance of the duties of
the Employee hereunder. The Employee will not, during or after the term
hereof, in whole or in part, disclose, and has not prior to the
commencement of the term hereof disclosed, such secrets or confidential or
proprietary information to any person, firm, corporation, association or
other entity for any reason or purpose whatsoever, except in furtherance of
the Employee's duties under this Agreement. The Employee will not make use
of any such property for his own purposes or for the benefit of any person,
firm, corporation or other entity (except SDI and the Company) under any
circumstances, during or after the term hereof, and the Employee has not
prior to the commencement of the term hereof made such use, provided
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that after the term hereof these restrictions shall not apply to such
secrets or information which are then in the public domain (provided
that the Employee was not responsible, directly or indirectly, for such
secrets or information entering the public domain without SDI's or the
Company's consent).
(b) The Employee has executed that certain Employee Nondisclosure
Agreement (the "Nondisclosure Agreement") dated the date hereof, a copy of
which is attached hereto and which document is hereby incorporated in its
entirety and made a part hereof for all purposes.
9. INTELLECTUAL PROPERTY.
(a) The Employee has no proprietary, financial or other interest,
direct or indirect, in whole or in part, in any Intellectual Property or in
any application therefor which SDI or the Company (or any of their
affiliates) owns, possesses or uses in their business as now and heretofore
conducted. As used in this paragraph 9, "Intellectual Property" shall mean
all (i) trademarks and service marks (registered or unregistered) and trade
names, and all goodwill associated therewith; (ii) patents, patentable
inventions, discoveries, improvements, ideas, know-how, processes and
computer programs, software and databases (including source code); (iii)
trade secrets and the right to limit the use or disclosure thereof; (iv)
copyrights in all works, including software programs and mask works; and
(v) domain names.
(b) Worldwide rights in all Intellectual Property owned or used in
the business of SDI or the Company which are eligible for protection under
the present or future intellectual property laws, worked on or conceived
during the term of this Agreement or within six months thereafter by the
Employee, alone or in conjunction with others, shall belong solely and
exclusively to SDI or the Company, as applicable. If conceived or worked
on together with another who is not employed or otherwise engaged by SDI or
the Company, these such rights shall belong exclusively to SDI or the
Company, as applicable, to the fullest extent possible. The Employee
agrees to assign all rights referred to in this paragraph to SDI or the
Company, as applicable.
(c) At any time during or after the term of this Agreement, the
Employee shall execute all papers and perform any other actions which are
deemed by SDI or the Company or their attorneys to be reasonable and
necessary for the application, issuance and/or maintenance, enforcement or
assignment of any Intellectual Property owned or used in the business of
SDI or the Company in the United States and internationally, in the name of
SDI or the Company, as
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applicable. The Employee shall, if requested, execute a form of
assignment necessary for the assignment of any and all Intellectual
Property or applications and/or registrations for such Intellectual
Property.
(d) The Employee will not knowingly use any methods, techniques or
software that are proprietary to a third party or which would infringe the
Intellectual Property rights of a third party. The Employee shall perform
his duties under this Agreement in accordance with ethical professional
standards.
10. CONFLICTS OF INTEREST.
(a) In keeping with the Employee's fiduciary duties to SDI and the
Company, the Employee agrees that he shall not, directly or indirectly,
become involved in a conflict of interest, or upon discovery thereof, allow
such a conflict to continue.
(b) It is agreed that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect SDI, the
Company or any of their affiliates, involves a possible conflict of
interest. Circumstances in which a conflict of interest on the part of the
Employee would or might arise, and which should be reported immediately by
the Employee to the Boards of Directors of SDI or the Company, as
applicable, include, without limitation, the following:
(i) ownership of a material interest in, acting in any capacity
for, or accepting directly or indirectly any payments, services or
loans from a supplier, contractor, subcontractor, customer or other
entity with which SDI, the Company or any of their affiliates does
business;
(ii) misuse of information or facilities to which the Employee
has access in a manner which will be detrimental to SDI, the Company's
or any of their affiliates interests;
(iii) disclosure or other misuse of information of any kind
obtained through the Employee's connection with SDI, the Company or
any of their affiliates;
(iv) acquiring or trading in, directly or indirectly, other
properties or interests connected with the development or marketing of
products or services in competition with those marketed by SDI, the
Company or any of their affiliates;
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(v) the appropriation to the Employee or the diversion to others,
directly or indirectly, of any opportunity in which it is known or
could reasonably be anticipated that SDI, the Company or any of their
affiliates would be interested; and
(vi) the ownership, directly or indirectly, of a material
interest in an enterprise which is or through the assistance of the
Employee could become in competition with SDI, the Company or any of
their affiliates or any of their respective dealers and distributors
or acting as a director, officer, partner, consultant, employee or
agent of any enterprise which is or through the assistance of the
Employee could become in competition with SDI, the Company or any of
their affiliates or any of their respective dealers or distributors.
11. INJUNCTIVE RELIEF. If there is a breach or threatened breach of
the provisions of paragraph 7,8,9 or 10 of this Agreement, SDI and the Company
shall be entitled to an injunction restraining the Employee from such breach.
Nothing herein shall be construed as prohibiting SDI or the Company from
pursuing any other remedies for such breach.
12. EFFECT OF TERMINATION. Upon the termination of this Agreement,
this Agreement shall thereupon be and become void and of no further force or
effect, except as otherwise sets forth herein and except that the Nondisclosure
Agreement shall survive any said termination and shall continue to bind the
Employee. Any payments due pursuant to the terms of this Agreement for services
rendered prior to the termination shall be made as provided in this Employment
Agreement.
13. BUSINESS EXPENSES. During the term of this Agreement, and so
long as the Employee is not in default of any obligations hereunder, the Company
shall pay or reimburse the Employee for any and all reasonable and necessary
expenses, properly receipted in accordance with the requirements of the Internal
Revenue Code of 1986, as amended, and Company policies (which shall include
appropriate written itemization and substantiation of expenses incurred)
incurred by the Employee in the performance of his duties hereunder.
14. EMPLOYEE BENEFITS. During the term of this Agreement, the
Employee shall participate in all employee benefit plans of SDI and the Company
as of the date hereof or the employee benefit plans of any present or future
affiliated corporations which are made generally available to employees of SDI
or the Company, and shall have the opportunity to participate in the SDI
Incentive Stock Option and Executive Compensation Plans, subject
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to the eligibility, enrollment and other requirements of all such plans.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given or
delivered if delivered personally or mailed by registered or certified mail,
return receipt requested, with first class postage prepaid, to his residence in
the case of the Employee and to their principal offices in the case of SDI and
the Company.
16. BREACH, WAIVER OF BREACH. The waiver by SDI or the Company of a
breach of any provision of this Agreement by the Employee shall not operate or
be construed as a waiver of any subsequent breach by the Employee.
17. LAW TO GOVERN. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas, without regard
to principles of conflict of laws.
18. ASSIGNMENT. The rights and obligations of SDI and the Company
under this Agreement shall inure to the benefit of and shall be binding upon
their successors and may be assigned, for all or any part of the term hereof, by
SDI or the Company to any corporation, (a) which at the time controls the
capital stock of SDI or the Company, (b) which succeeds to substantially all the
assets of SDI or the Company or (c) the controlling capital stock of which is at
the time owned by SDI or the Company; PROVIDED, HOWEVER, that in the event of
any transaction specified in subparagraphs (a), (b) or (c), SDI or the Company,
as applicable, shall remain liable with respect to their obligations under this
Agreement. In the event of such assignment, any and all references to "SDI" or
the "Company" in other paragraphs of this Agreement shall be deemed to mean and
include an assignee corporation. This Agreement shall not be assignable by the
Employee.
19. ENTIRE AGREEMENT. This instrument contains the entire agreement
of the parties with respect to employment. It may not be changed orally but
only an agreement in writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first hereinabove written.
STRATEGIC DISTRIBUTION, INC.
By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
INTERMAT ACQUISITION CORP.
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By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary
/s/ XXXXXXX X. XXXXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxxxx
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