November 20, 1996
Mr. Xxxxxx Xxxxxxx
00 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxxxx:
This agreement will serve to confirm the terms and conditions under which
we will be accepting your resignation as Vice President - Finance and Chief
Financial Officer and Treasurer.
1. Resignations. Effective immediately, you are resigning as Vice
President - Finance and Chief Financial Officer and Treasurer and any other
officerships or directorships of Micro Warehouse, Inc. or any of its affiliates,
sister companies or subsidiaries (hereinafter "the Company"). You are not
resigning your employment with the Company, which shall continue, subject to the
provisions of this agreement, until September 30, 1997 (hereinafter "the
Termination Date").
2. Employment Agreement. Your Employment Agreement dated as of January 1,
1995 is terminated. Through September 30, 1997 you shall be paid your current
salary and receive all benefits provided by your Employment Agreement (except
that there shall be no vacation benefits). All of the Company's employment
policies will be applicable to you. You shall not be eligible to receive any
1996 or 1997 bonus notwithstanding the possibility that other comparably
compensated employees might receive bonuses attributable to either of said
years.
3. Duties. Your duties shall include support of any task force or related
efforts in connection with the preparation of the Company's restated financial
information and support of the Company's preparation and filing of its Form
10-K, Annual Report,
Proxy and related materials and you shall report to Xxxx Xxxx, President and
Chief Executive Officer. You shall additionally perform such other duties as he
shall require of you from time to time. It is not anticipated that you shall be
required to perform these duties on any Micro Warehouse, Inc. premises; however,
it may be necessary from time to time for you to meet with Micro Warehouse
employees or advisors and you shall make yourself available to do so during
normal business hours.
4. Stock Options. Schedule B-1 sets forth, inter alia, stock options
already granted to you which may be exercised by you on or prior to December 31,
1997. Subsequent to November 20, 1996 you shall not be bound by the Company's
trading window policies although you are still subject to the rules and
regulations of the Securities and Exchange Commission or any state securities
regulatory agencies. Schedule B-1 also sets forth all other stock options
granted to you which as of the date of this agreement have not yet vested. We
confirm that we will not forfeit these options and deem these options vested as
of the date indicated on Schedule B-1 and that they may be exercised by you on
or prior to December 31, 1997. Said Schedule B-1 also sets forth other stock
options granted to you which are deemed forfeited and of no further force and
effect. 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. Repayment of Incentive Compensation. You acknowledge that you have
received incentive compensation attributable to the 1995 year in the gross
amount of $490,000.00. You shall be required to repay to us the amount of
$316,572.00 (representing the net amount paid to you after withholding of
requisite taxes from the same) on or prior to December 31, 1996. Your failure to
do so shall constitute a breach of your obligations under this agreement in
which event we reserve all rights and remedies whether at law or equity arising
from the same. Notwithstanding any other rights and/or remedies available to us
in this instance,
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the failure to make this repayment shall cause a forfeiture of your right to
exercise certain stock options separately identified on Schedule B-1.
6. Indemnification. We confirm that the Indemnification Agreement between
you and the Company dated as of January 25, 1994 is in full force and effect.
7. 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, 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
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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 or pursuant to Article 6 hereof. 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) Effective as of the Termination Date, the releases provided for
in Paragraph 7(a) will, without further action, be automatically extended to
cover all acts, failures to act and other events (other than any breach of this
agreement by the Company) occurring between the date hereof and such date.
(c) The releases under this Paragraph 7 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.
(d) 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.
8. Covenant Not to Compete. In consideration for the Company's
undertakings described in this agreement, you hereby
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covenant and agree that through the Termination Date (the "Non-Compete Period"),
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 one percent (1%) 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 that is substantially the same as, or related to any
business or activity conducted by the Company, regardless of where such
Competitive Business is located.
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
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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
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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. Covenant Not to Solicit. Unless you receive the prior written consent
of the Company you hereby covenant and agree that, from the date hereof until
the expiration on the Non-Compete Period, you shall not, for or on behalf of a
Competitive Business, directly or indirectly, as owner, officer, director,
stockholder, partner, associate, consultant, manager, advisor, representative,
employee, agent, creditor or otherwise, attempt to solicit or in any other way
disturb or service any person, firm or corporation that has been a customer
account of the Company at any time or times prior to the termination of the
Period of Employment, whether or not you at any time had any direct or indirect
account responsibility for, or contact with, such customer account.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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 to comply
with applicable law. In addition, nothing contained herein shall be construed to
prohibit either party from disclosing the terms and conditions of this agreement
to its attorneys, accountants or bookkeepers or to any other person 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
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hereby.
17. Enforcement of Agreement; Liquidated Damages. You hereby acknowledge
and agree that your obligations under Paragraphs 8, 9 and 10 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. You also acknowledge and agree that, if you fail to satisfy any of your
obligations under Paragraphs 8, 9 and 10, the Company will be entitled to
receive as liquidated damages for such failure recovery of any amounts paid to
you under this agreement after such failure, any amounts that you may have
earned or received as a result of or in connection with such failure, and all
costs and expenses, including fees and disbursements of counsel and other costs
thereof, incurred by the Company in connection with the enforcement of such
obligations.
18. 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.
19. COBRA Benefits. You acknowledge that the Company will have no
obligation to pay directly or reimburse you for any COBRA payments due
subsequent to the Termination Date.
If you agree to and accept the terms and conditions of this agreement,
please sign both copies hereof in the space provided
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below, retain one copy for your records and return the other copy to the
undersigned.
Very truly yours,
MICRO WAREHOUSE, INC.
By: _________________________________
Name: Xxxxxxx X. Xxxx, Xx.
Title: President & Chief Executive
Officer
Agreed to and accepted on the
date first above written:
_________________________________
Xxxxxx Xxxxxxx
Date Signed: December __, 1996
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