EMPLOYMENT AGREEMENT
BETWEEN
ANACOMP, INC.
("ANACOMP")
with offices located at
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx 00000
and
XXXXX X. XXXXXXX
("EMPLOYEE")
Date of Agreement: December 7, 1997
Effective Date of Agreement: October 1, 1997
Date of Expiration of Agreement: September 30, 2000
EMPLOYMENT AGREEMENT
This Agreement is entered into between ANACOMP, INC. or any of its
subsidiaries or affiliates (herein referred to as "ANACOMP") and EMPLOYEE. The
full identification of each party, date of Agreement, effective date of
Agreement, and date of expiration of Agreement are all included on the cover
sheet immediately preceding this page which is incorporated herein by this
reference. The following conditions and terms shall apply:
SECTION I
Merger of All Prior Agreements
1.1 Merger. This Agreement between the parties shall supersede and
terminate all prior employment contracts and agreements between EMPLOYEE and
ANACOMP. In the event of any conflict, the terms of this Agreement shall govern.
SECTION II
Scope and Term of Employment, Compensation
2.1 Scope of Employment. ANACOMP and EMPLOYEE mutually agree that
Addendum I, attached hereto and incorporated herein by this reference, is
intended to define the scope of employment, base salary, and incentive
compensation.
2.2 Employment Term. Subject always to termination provisions as
provided elsewhere in this Agreement, the term of this Agreement shall begin on
the Effective Date of Agreement and shall terminate on the Date of Expiration of
Agreement, both as shown on the cover sheet. Unless otherwise terminated as
provided elsewhere herein, this Agreement shall automatically renew after
expiration date on an annual basis unless either party gives the other party
thirty (30) days prior written notice requesting that said Agreement not be
renewed. If this Agreement is not renewed and EMPLOYEE continues working beyond
Termination Date at the request of ANACOMP, said employment shall be on a
month-to-month basis. If, at the expiration of the original three-year term or
any renewal term, ANACOMP declines to renew this Agreement and does not request
that EMPLOYEE continue working, of if ANACOMP terminates the month-to- month
employment basis described in the previous sentence, EMPLOYEE shall be entitled
to all benefits due him under this Agreement and not previously paid, a
severance payment equal to EMPLOYEE's prior twelve months' salary, payable in a
lump sum or biweekly at EMPLOYEE's option, health benefits until other
employment is secured or for twelve months, whichever is sooner, and the
immediate vesting of all of EMPLOYEE's existing already awarded options to
acquire ANACOMP common stock. If, on the other hand, EMPLOYEE elects not to
renew the Agreement, EMPLOYEE shall only be entitled to all benefits due him
under the Agreement through the end of the then term of the Agreement.
2.3 Compensation. Compensation is confidential and is to be discussed
only with the Board of Directors of ANACOMP, as required.
SECTION III
Fringe Benefits
3.1 Benefits. In addition to the regular compensation, EMPLOYEE shall
be entitled to the normally available employee fringe benefits including regular
holidays, vacations and health insurance. ANACOMP, however, reserves the right
to change or alter these fringe benefits from time to time with the
understanding that the EMPLOYEE will be treated on an equal basis with other
employees of similar status.
SECTION IV
Insurance on Employee
4.1 Insurance. EMPLOYEE agrees that ANACOMP may, at its option and
expense, obtain life insurance on the life of the EMPLOYEE and the ownership of
all such policies and the proceeds therefrom shall be the sole property of
ANACOMP. EMPLOYEE agrees to undergo a routine physical examination for insurance
purposes within fifteen (15) days upon the request and at the expense of
ANACOMP.
SECTION V
Termination
5.1 Compensation and Benefits Upon Termination. This Agreement may be
terminated prior to the expiration of the initial term or any renewal term by
any of the following events:
(a) mutual written agreement expressed in a single document signed by
both ANACOMP and EMPLOYEE;
(b) voluntary written resignation by EMPLOYEE given to ANACOMP ninety
(90) days prior to the date of resignation;
(c) death of EMPLOYEE;
(d) written notice of termination by ANACOMP without cause as defined
in Section 5.2;
(e) written notice of termination by ANACOMP with cause as defined in
Section 5.3; or
(f) the occurrence of any of the events specified in Section 5.4.1,
which EMPLOYEE elects to treat as a termination.
(g) the occurrence of any of the events specified in Section 5.4.2,
which EMPLOYEE elects to treat as a termination.
Upon termination for any of the foregoing reasons, EMPLOYEE shall
continue to render his services and shall be paid his regular compensation and
benefits up to the date of termination. If this Agreement is terminated under
Sections 5.1(b), 5.1(c) or 5.1(e), no Severance Allowance (as defined below)
shall be paid to EMPLOYEE (except, with respect to any termination pursuant to
Section 5.1(e), as otherwise provided in Section 5.3). If this Agreement is
terminated under Sections 5.1(a), 5.1(d), 5.1(f) or 5.1(g), then ANACOMP shall
pay to EMPLOYEE a severance allowance equal to the EMPLOYEE's prior twenty-four
months cash compensation ($1 million maximum), payable in a lump sum or biweekly
at EMPLOYEE's option, health benefits until other employment is secured or for
twenty-four months, whichever is sooner, and all of EMPLOYEE's existing already
awarded options to acquire ANACOMP common stock shall immediately vest
(collectively, the "Severance Allowance"). This Severance Allowance is in
addition to the regular compensation and benefits which EMPLOYEE shall receive
up to the date of termination. In the event of such termination, this Agreement
shall be deemed terminated for all purposes except to the extent otherwise
herein provided.
5.2 Termination Without Cause. If ANACOMP concludes that EMPLOYEE's
services are no longer required, this Agreement may be terminated without cause
by giving EMPLOYEE written notice thereof. The noninsurability of EMPLOYEE,
either present or future, does not constitute grounds for termination under this
or any other section of the Agreement. If EMPLOYEE is terminated under this
section, ANACOMP shall pay EMPLOYEE the compensation, benefits and Severance
Allowance provided in Section 5.1 above.
5.3 Termination With Cause.
5.3.1 ANACOMP may immediately terminate this Agreement at any time
with cause upon written notice to the EMPLOYEE specifying the cause and
effective date of termination. As used in this section, "cause" shall mean only
the following:
(i) Inability of EMPLOYEE, as determined by ANACOMP, to perform
EMPLOYEE's assigned duties on a fulltime basis for any continuous period of one
hundred twenty (120) days or a total of one hundred eighty (180) days in any
twelve (12) month period, which period shall commence on the initial date of
this Agreement and every anniversary thereafter.
(ii) The willful and continued failure by EMPLOYEE substantially
to perform his duties and obligations, including the continued failure to meet
business goals, or the willful engagement by EMPLOYEE in misconduct which is
materially injurious to ANACOMP, monetarily or otherwise. For purposes of this
subsection, no act or failure to act on EMPLOYEE's part shall be considered
"willful" unless done or omitted to be done by EMPLOYEE in bad faith and without
reasonable belief that his action or omission was in the best interests of
ANACOMP.
5.3.2 Employee agrees that in the event written notice of
termination is given under this Section 5.3, the EMPLOYEE agrees to treat the
contents of said notice as privileged and EMPLOYEE shall have no action against
ANACOMP or any of its officers, agents or employees due to the contents of said
notice unless the contents are intentionally false and malicious. If EMPLOYEE is
terminated under this Section 5.3, he shall receive no Severance Allowance at
the time of such termination. If EMPLOYEE is given notice of termination under
this Section 5.3 and it is later established that no "cause" existed, EMPLOYEE
shall be entitled to all compensation, benefits and allowances due him for the
period following such alleged termination and through the date of such
determination and shall be entitled to the Severance Allowance, plus legal
interest from the date of termination and all reasonable attorneys' fees
incurred by EMPLOYEE in contesting the notice of termination.
5.4 Demotion, Transfer or Reduction in Compensation, Merger, Transfer
of Assets, Change in Control or Business Discontinuation.
5.4.1 Demotion, Transfer, or Reduction in Compensation.
If any of the following takes place:
(1) EMPLOYEE is demoted, including for these purposes (i) any material
change in the title or duties described in Addendum I hereto, or (ii) any
significant reduction or change by ANACOMP in the functions, duties or
responsibilities of EMPLOYEE under this Agreement,
(2) any reduction in annual base salary (but not including a reduction
in the incentive bonus received by EMPLOYEE resulting from his or ANACOMP's
performance under any of the bonus plans discussed in Addendum II hereof),
EMPLOYEE may, in his sole discretion, elect to treat any such occurrence as a
termination of this Agreement by giving written notice of such election to
ANACOMP, entitling EMPLOYEE to payment of the compensation, benefits and
Severance Allowance provided in Section 5.1 above. In the event ANACOMP disputes
any election made by EMPLOYEE pursuant to this Section 5.4.1, ANACOMP shall
notify EMPLOYEE in writing of such dispute within ten (10) days of receiving
EMPLOYEE's written election and both parties shall proceed to negotiate a
resolution of such dispute in good faith. If ANACOMP does not so notify EMPLOYEE
within the ten (10) day period, ANACOMP shall be deemed to have accepted
EMPLOYEE's election and shall pay all compensation, benefits and Severance
Allowance provided in Section 5.1 above.
5.4.2 Merger, Transfer of Assets, Change in Control or Business
Discontinuation. In the event of any:
(a) merger or consolidation where ANACOMP is not the consolidated
or surviving company and the surviving or resulting company does not expressly
agree to be bound by and have the benefits of the provisions of this Agreement,
or
(b) transfer of all or substantially all of the assets of ANACOMP
and the transferee of ANACOMP's assets does not expressly agree to be bound by
and have the benefits of the provisions of this Agreement, or
(c) change in control of ANACOMP of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 as in effect on the
day thereof (the "Exchange Act"), provided that, without limitation, such a
change in control shall be deemed to have occurred if: (i) during any period of
two (2) consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute a majority thereof,
unless the election or nomination for election by ANACOMP's shareholders of each
new director was approved by a vote of at least 2/3 of the directors who were
directors at the beginning of such period; or (ii) transfer of all or
substantially all of the stock of ANACOMP and the transferee of ANACOMP's stock
does not expressly agree to be bound by and have the benefits of the provisions
of this Agreement, or
(d) discontinuation of the business by ANACOMP, then, (i) EMPLOYEE
may, in his sole discretion, elect to treat any such occurrence as a termination
of this Agreement by giving written notice of such election and immediate
termination of his employment to ANACOMP, and (ii) ANACOMP shall pay EMPLOYEE
within thirty (30) days of EMPLOYEE's election and termination of employment a
payment equal to the Severance Allowance. This Severance Allowance shall be in
addition to the regular compensation and benefits that EMPLOYEE is entitled to
receive up to the date EMPLOYEE's employment with ANACOMP terminates.
5.5 Return of Company Property. EMPLOYEE agrees to return all property
of ANACOMP, including but not limited to, details of equipment, prices,
specifications, programs, customer and prospective customer lists and any other
proprietary data or objects acquired through the EMPLOYEE's employment with
ANACOMP, within seven (7) days after termination of employment, regardless of
the reason therefor.
5.6 Waiver of Claims. All Severance Allowance payments made by ANACOMP
to EMPLOYEE pursuant to Section II hereof or this Section V shall be in full and
complete payment of any and all claims that EMPLOYEE may have against ANACOMP
regarding his employment or the termination thereof, and EMPLOYEE hereby
expressly waives all rights that he may have to any other payments or to bring
any other claims based upon his employment or the termination thereof. Except
for the qualification with respect to employee benefits described in Section II
above, all Severance Allowance payments due from ANACOMP to EMPLOYEE under this
Agreement are absolute, and shall not be diminished or otherwise affected by
virtue of EMPLOYEE's securing alternative employment. At the time he receives
his Severance Allowance, EMPLOYEE agrees that he will execute a release
agreement in favor of ANACOMP.
SECTION VI
Restrictive Covenant and Non-Competition
Confidential Information
6.1 Non-Competition. EMPLOYEE and ANACOMP shall enter into the
"Confidentiality, Non-Competition and Non-Disclosure Agreement" attached hereto
as Addendum III. In the event of any conflict between the terms of this
Agreement and such Non-Disclosure Agreement, this Agreement shall govern. If
EMPLOYEE violates such Non-Disclosure Agreement, ANACOMP shall have the right to
stop all termination payments due under Sections II and/or V hereof, which have
not yet been fully paid to EMPLOYEE.
The provisions of this Section shall not prevent EMPLOYEE from
complying with the terms of this Agreement with ANACOMP nor from owning any
shares of stock of any competitor of ANACOMP so long as such shares are
regularly traded on a recognized security exchange or are listed for trade by
NASDAQ in the Over-the-Counter Market.
SECTION VII
Warranties and Representations
7.1 EMPLOYEE hereby warrants and represents as follows:
(1) That the execution of this Agreement and the discharge of
EMPLOYEE's obligations hereunder will not breach or conflict with any other
contract, agreement or understanding between EMPLOYEE and any other party or
parties.
(2) That EMPLOYEE has ideas, information and know-how relating to the
type of business conducted by ANACOMP and EMPLOYEE's disclosure of such ideas,
information and know-how to ANACOMP will not conflict with or violate the rights
of any third party or parties with respect thereto.
SECTION VIII
Remedies
8.1 The parties agree that the remedy for breach of this Agreement
shall include actions in equity for injunctive relief as well as money damages.
The remedies given to or reserved by each party hereunder shall be cumulative
and not exclusive of any other remedy available under law.
SECTION IX
No Waiver
9.1 The failure of EMPLOYER to terminate this Agreement for the breach
of any condition or covenant herein by the EMPLOYEE shall not affect EMPLOYER's
right to terminate for subsequent breaches of the same or other conditions or
covenants. The failure of either party to enforce at any time or for any period
of time any of the provisions of this Agreement shall not be construed as a
waiver of such provisions or of the right of the party thereafter to enforce
each and every such provision.
ARTICLE X
Benefit
10.1 This Agreement shall bind, benefit, and be enforceable by ANACOMP,
its successors and assigns, and by EMPLOYEE, EMPLOYEE's heirs, executors,
administrators, and legal representatives.
ARTICLE XI
Severability
11.1 Should any provision of this Agreement not be enforceable in any
jurisdiction, the remainder of the Agreement shall not be affected thereby.
ARTICLE XII
Survival
12.1 The obligations contained in Sections II, V, and VI shall survive
the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the day, month and year stated on the cover page
of this Agreement, which Agreement shall be effective only upon approval by
ANACOMP, INC., as evidenced by the authorized signature of an officer of ANACOMP
below.
APPROVED BY:
ANACOMP, INC. EMPLOYEE:
By: /Xxxxxx X. Xxxxx/ /Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Chairman, Compensation Committee
ADDENDUM I
TO
EMPLOYMENT AGREEMENT DATED DECEMBER 7, 1997
BETWEEN
ANACOMP, INC. ("ANACOMP")
AND
XXXXX X. XXXXXXX ("EMPLOYEE")
Scope of Employment
ANACOMP will employ the EMPLOYEE in the capacity of President and Chief
Executive Officer of ANACOMP. EMPLOYEE will be responsible for establishing
ANACOMP's strategic direction and operational priorities, determining the
organizational structure for all of ANACOMP's operating divisions and strategic
business units, establishing all ANACOMP management compensation plans and
submitting such plans to ANACOMP's Board of Directors, and developing ANACOMP's
policies and procedures.
Location
EMPLOYEE will be based at ANACOMP's Poway, California facility.
Base Salary
For all services rendered by EMPLOYEE under this Agreement, EMPLOYEE
shall receive a Base Salary of $400,000 per year payable bi-weekly. This Base
Salary will take effect on October 1, 1997. Base Salary will be reviewed at the
beginning of each fiscal year.
Incentive Compensation
Bonuses
In addition to Base Salary, EMPLOYEE shall receive an annual bonus
opportunity of $266,667 payable quarterly, as more particularly described in the
EMPLOYEE's Compensation Plan attached hereto as Addendum II. This annual bonus
will take effect on October 1, 1997. The annual bonus shall be established at
the beginning of each fiscal year.
Stock Options
ANACOMP has awarded EMPLOYEE with an additional non-qualified stock
option to purchase 42,500 shares of ANACOMP Common Stock at a price of $13.50
per share, vesting on 9/30/98.
ANACOMP, INC. EMPLOYEE
By: /Xxxxxx X. Xxxxx/ /Xxxxx X. Xxxxxxx/
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Chairman, Compensation Committee
ADDENDUM II
TO
EMPLOYMENT AGREEMENT DATED
BETWEEN
ANACOMP, INC. ("ANACOMP")
AND
XXXXX X. XXXXXXX ("EMPLOYEE")
MANAGEMENT 1A
PERIOD: 10/1/97 TO 9/30/98 NAME: Xxxxx X. Xxxxxxx
You are assigned the following compensation related items:
(Percentage Total Compensation)
1 QTR 2 QTR 3 QTR 4 QTR YEAR
1. Base Salary $ 400,000
2. Area Profit Bonus (10%) $ $ $ $ $ 66,667
16,667 16,667 16,667 16,667
Area Profit Goal $ 3,919,000 $ 4,332,000 $ 6,384,000 $ 7,821,000 $ 22,455,000
Area Profit Center(s)
0001
3. Area Revenue Bonus (16%) $ $ $ $ $ 106,667
26,667 26,667 26,667 26,667
Area Revenue Goal $118,675,000 $121,008,000 $127,589,000 $129,628,000 $496,900,000
Area Revenue Center(s)
0001
4. Asset Management Bonus(6%) $ $ $ $ $ 40,000
10,000 10,000 10,000 10,000
Asset Management Target - Inventory $ 3,200,000
Asset Management Center(s) See Attached Schedule for A/R Target Information
0001
5. Corporate EBITDA Bonus (8%) $ $ $ $ $ 53,333
13,333 13,333 13,333 13,333
Corporate EBITDA Goal $ 19,918,000 $ 20,736,000 $ 23,911,000 $ 26,151,000 $ 90,716,000
COMPENSATION COMPUTATIONS:
AREA PROFIT BONUS: Upon the quarterly closing of the corporate books, the
quarter's actual performance as a percentage of the quarter's quota is
calculated and computed for Anacomp Adjusted Net Income. Payment percentage is
calculated per the attached Accelerator and Decelerator Schedule.
AREA REVENUE BONUS: Upon the quarterly closing of the corporate books, the
quarter's actual performance as a percentage of the quarter's quota is
calculated and computed for Anacomp Total Revenue. Payment percentage is
calculated per the attached Accelerator and Decelerator Schedule.
ASSET MANAGEMENT BONUS: Paid quarterly on Anacomp's quarterly asset management
targets. Asset Management Targets include $3,200,000 in inventory reductions as
well as an Accounts Receivable DSO and Percentage Past Due calculation. Nothing
paid for performance less than 90% of goal. For performance >=90% and <=100% of
goal, payment percentage is calculated as follows: Payment % = 50 +
((Performance % - 90) * 5)
.........Examples Performance Payment
......... < 90% 0%
......... 90% 50%
......... 100% 100%
......... >100% 100%
.........Maximum payment percentage is 100% of bonus amount
CORPORATE EBITDA BONUS: Paid quarterly based on Anacomp, Inc. EBITDA quarterly
goals. Nothing paid for performance less than 90% of goal. Payment percentage is
calculated as follows: Payment % = 50+((Performance % - 90) * 5)
.........Examples Performance Payment
......... < 90% 0%
......... 90% 50%
......... 100% 100%
......... >120% 200%
SCHEDULE OF ACCELERATORS AND DECELERATORS
.........% Goal % Paid Scale
----------------------------------------
.........150 185 1.75
.........140 167 1.75
.........130 150 1.75
.........120 132 1.75
.........110 115 1.75
.........106 108 1.5
.........105 106 1.5
.........104 105 1.5
.........103 103 1
.........102 102 1
.........101 101 1
.........100 100 1
......... 99 99 1
......... 98 98 1
......... 97 97 1
......... 96 95 1.625
......... 95 94 1.625
......... 94 92 1.625
......... 90 84 2
......... 80 64 2
......... 70 44 2
......... 60 24 2
......... 50 4 2
ADMINISTRATIVE PROCEDURES:
1. Achievement numbers for compensation are taken from the Company
financial statements prepared in accordance with Anacomp's policies.
2. There will be no draws against the incentive base.
3. Any Incentive Base payments discussed herein are earned by and payable
only to those managers employed by Anacomp, Inc. on the last day of the
period when such payment would be due.
4. The corporation has the right, at any time, to adjust prospectively a
manager's salary or goals, or to change any other term or condition of
this plan. All elements of the CEO's compensation plan, including
salary, incentive base and goals, need the approval of the compensation
committee of the Board of Directors.
5. Goals are assigned annually. All computations and resulting payments
are based on approved quarterly goals. Each quarter stands alone for
compensation purposes.
ADDENDUM III
TO
EMPLOYMENT AGREEMENT DATED DECEMBER 7, 1997
BETWEEN
ANACOMP, INC. ("ANACOMP")
AND
XXXXX X. XXXXXXX ("EMPLOYEE")
In consideration of the employment or continued employment of EMPLOYEE by
Anacomp, Inc. and its successors, assigns, subsidiaries, or duly authorized
representatives (hereinafter collectively referred to as "Anacomp") and of the
award of an option for the purchase of 42,500 shares of Anacomp, Inc. Common
Stock, par value $.01 per share, at a price of $13.50 (price as set on the date
of award), EMPLOYEE hereby agrees as follows:
1. Confidentiality and Trade Secrets. The EMPLOYEE recognizes and acknowledges
that during the course of his/her employment, he/she will have access to and
become acquainted with confidential, trade secret and proprietary information
about Anacomp's businesses and customers (hereinafter collectively referred to
as the "Protected Information"). The parties hereto recognize that the Protected
Information available to EMPLOYEE may pertain both to customers and accounts
handled by EMPLOYEE personally as well as accounts with which EMPLOYEE is not
personally involved. The parties agree that all Protected Information
constitutes a trade secret of Anacomp. Protected Information may include, but is
not limited to, the names, addresses, and requirements of any customer or
prospective customer of Anacomp; the terms (including price terms) of
contractual relations with such customers; special requirements of such
customers; the identities of individual contacts at such customers; and any
other information relating to Anacomp's research, operations, business
relationships, engineering data or results, specifications, concepts, methods,
processes, rates or schedules, vendor information, products or services
(including prices, costs, sales or content), financial information or measures,
business methods, future business plans, data bases, computer programs, designs,
models, operating procedures, and knowledge of the organization. The EMPLOYEE
recognizes and acknowledges that all of the Protected Information is valuable,
special and essential to the successful and effective conduct of Anacomp's
business. Therefore, the EMPLOYEE shall not, during his/her employment with
Anacomp or at any time thereafter, regardless of the reasons for leaving that
employment, use, disclose or communicate, directly or indirectly, any Protected
Information to any third party for any reason or purpose whatsoever, except as
required in the course of his/her employment with Anacomp. Further, upon the
termination of his/her employment with Anacomp, for any reason whatsoever,
EMPLOYEE shall promptly return any and all copies of any written material,
documents, computer hardware and software, tools and equipment belonging to
Anacomp or relating to the business of Anacomp in his/her possession.
2. Non-Competition.
2.1 Non-Competition While an EMPLOYEE or Consultant. While an employee of
Anacomp, or as a consultant to Anacomp after his termination of employment,
EMPLOYEE agrees not to compete in any manner, either directly or indirectly as
an employee, consultant, investor or owner, whether for compensation or
otherwise, with Anacomp, or to assist any other person or entity to compete with
Anacomp. Further, while an employee of Anacomp, EMPLOYEE agrees not to engage in
any other employment without the prior written permission of Anacomp.
3. Non-Solicitation.
3.1 Non-Solicitation of Employees. During the term of his/her employment at
Anacomp and for two (2) years following the termination for any reason of such
employment, EMPLOYEE agrees, either on his/her own behalf or on behalf of any
other person or entity, directly or indirectly, not to hire, solicit, or
encourage to leave the employ of Anacomp any person who is then an employee of
Anacomp. The foregoing restrictions shall apply to employees located in all
geographical areas where EMPLOYEE performed services for Anacomp during the
two-year period prior to his/her termination, including areas for which EMPLOYEE
had supervisory authority.
3.2 Non-Solicitation of Customers. Because of EMPLOYEE's access to
Protected Information of Anacomp, EMPLOYEE agrees that, during the term of
his/her employment at Anacomp and for two (2) years following the termination
for any reason of such employment, he/she will not, directly or indirectly, in
connection with the products and services offered by Anacomp and those products
and services which are competitive with the products and services of Anacomp:
(a) solicit, attempt to obtain, or in any way transact business with any
customers which were customers of Anacomp during his/her employment or at the
time of his/her termination; (b) aid or assist any other party in the
solicitation of any such customers; or (c) interfere with Anacomp's
relationships with any of its customers by soliciting such customers or inducing
them to discontinue their relationships with Anacomp. Products and services
which are competitive with the products and services of Anacomp include but are
not limited to: Micrographics Products (computer output to
microfilm-COM-equipment and software, cameras and film, processors, duplicators,
retrieval and display equipment and software, computer aided
retrieval-CAR-systems, readers, reader printers, other micrographics equipment,
micrographics equipment maintenance, micrographics consumable supplies and
accessories, records management software); Output Services (computer output to
microfilm-COM, source document microfilming, output of data to compact disk,
laser printing, conversion of paper and film to electronic images, micrographic
or electronic imaging system design, consulting and education, system
implementation and integration); Electronic Image Management Products (hardware,
software, magnetics products including tapes, tape drives and optical media
supplies, maintenance of electronic imaging equipment); Electronic Image
Management Services (conversion of computer generated data to optical or laser
disk, COLD, electronic document imaging and workflow, conversion of paper
documents to electronic images, system design consulting and education, system
implementation and integration, conversion of microfilm to electronic images);
and Archival Services (storage, management and retrieval of all forms of
customer information and business records, including but not limited to paper,
microfiche, magnetic media and digital storage media). The foregoing
restrictions shall apply to all geographical areas where EMPLOYEE performed
services for Anacomp during the two-year period prior to his/her termination,
including areas for which EMPLOYEE had supervisory authority.
4. Remedies. EMPLOYEE acknowledges that compliance with Sections 1, 2 and 3 of
this Agreement is necessary to protect the business and good will of Anacomp and
that a breach of those sections will irreparably and continually damage Anacomp
for which money damages may not be adequate. Therefore, EMPLOYEE agrees that, in
the event he/she breaches or threatens to breach any of these Sections, Anacomp
shall be entitled to both a preliminary or permanent injunction in order to
prevent the continuation of such harm and money damages insofar as they can be
determined. Nothing in this Agreement, however, shall be construed to prohibit
Anacomp from also pursuing any other remedy, the parties having agreed that all
remedies shall be cumulative.
5. Inventions. EMPLOYEE agrees that all inventions, improvements, discoveries,
systems, techniques, ideas, processes, programs, and other things of value made
or conceived in whole or in part by EMPLOYEE while an employee of Anacomp shall
be and remain the sole and exclusive property of Anacomp, and he/she will
disclose all such things of value to Anacomp and will cooperate with Anacomp to
insure that the ownership by Anacomp of such things of value is protected.
Nothing in this Section is meant to apply to an invention for which no
equipment, supplies, facility or trade secret information of Anacomp was used,
which was developed entirely on EMPLOYEE's own time, and which does not relate
to Anacomp's business, research, development or from any work performed by
EMPLOYEE for Anacomp.
6. Employment. This Agreement does not confer upon EMPLOYEE any rights to
continue in the employ of Anacomp or affect in any way Anacomp's right to
terminate his/her employment at any time.
7. Severability. If any provision or clause of this Agreement, or portion
thereof, shall be held by any court or other tribunal of competent jurisdiction
to be illegal, void or unenforceable in such jurisdiction, the remainder of such
provisions shall not thereby be affected and shall be given full effect, without
regard to the invalid portion. It is the intention of the parties that, if any
court construes any provision or clause of this Agreement, or any portion
thereof, to be illegal, void or unenforceable because of the duration of such
provision or the area or matter covered thereby, such court shall reduce the
duration, area or matter of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
8. Binding Effect. The rights and obligations of this Agreement shall inure to
and be binding upon the parties and their respective heirs, successors and
assigns.
9. Attorneys' Fees. In the event of any dispute, proceeding or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the interpretation or breach thereof,
each party shall pay its own expenses, attorneys' fees, expert fees, and costs
incurred therein or in the enforcement or collection of any judgment or award
rendered therein.
10. No Waiver. Anacomp's failure to enforce any provision of this Agreement
shall not in any way be construed as a waiver of any such provision, or prevent
Anacomp thereafter from enforcing each and every provision of this Agreement.
11. Entire Agreement. This Agreement represents the entire agreement between
EMPLOYEE and Anacomp, with respect to the subject matter hereof, superseding all
previous oral and written communications, representations, understandings or
agreements.
12. EMPLOYEE's Understanding. EMPLOYEE represents and warrants that he/she has
read each and every term of this Agreement and understands the serious duties
and obligations imposed upon EMPLOYEE thereby. EMPLOYEE further represents and
warrants that he/she has had full and ample opportunity to question Anacomp
about this Agreement and each of its terms and to consult an attorney regarding
this Agreement and each of its terms. EMPLOYEE represents that he/she is free to
enter this Agreement and to perform each of its terms and covenants. EMPLOYEE
represents that he/she is not restricted or prohibited, contractually or
otherwise, from entering into and performing this Agreement, and that his or her
execution and performance of this Agreement is not a violation or breach of any
other agreement between EMPLOYEE and any other person or entity.
DATED: January 27, 1998
ANACOMP, INC.
By: /Xxxxxxx X. Xxxx/ /Xxxxx X. Xxxxxxx/
Xxxxxxx X. Xxxx EMPLOYEE (signature)
Its: Senior Vice President & XXX Xxxxx X. Xxxxxxx
----------------
.... EMPLOYEE (printed)
......... President & Chief Executive Officer
-----------------------------------
......... Current position
......... Poway, California
-----------------
......... Current location
......... ###-##-####
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......... Social Security Number
