EXHIBIT 10.7
EXECUTION COPY
/__/ Employee's Copy
/__/ Employer's Copy
AZTEC TECHNOLOGY PARTNERS, INC.
EMPLOYMENT AGREEMENT
To Xxxxxxxx X. Xxxxxxx:
This Agreement establishes the terms of your employment with Aztec
Technology Partners, Inc., a Delaware corporation (the "Company"), as of June
10, 1998. This Agreement is contingent on and subject to the closing of the
distribution (the "Distribution") to the U.S. Office Products Company ("USOP")
stockholders of the Company's stock. If the Distribution does not close by
September 30, 1998, this Agreement will have no force or effect.
Duties You agree to serve as a senior consultant to the Company
providing strategic business advice and high level acquisition
negotiations. In that capacity, you will report to the Company's
senior management and its Board of Directors (the "Board"). The
Board can require such reports of your activities on the Company's
behalf as it reasonably deems appropriate. It can require your
services to the extent consistent with your other contractual
employment obligations to Consolidation Capital Corporation
("CCC"), USOP, and the other subsidiaries ("Other Spincos") of
USOP whose common stock will be distributed to the USOP
stockholders concurrent with the Company's stock, with the
specific timing of your services to be mutually agreed. You agree
to comply with the Company's generally applicable personnel
policies to the extent applicable to a person working on your
schedule and consistent with your obligations in this Agreement.
Term The term of this Agreement runs from the day following the
effective date of the Distribution (the "Closing Date") through
June 30, 2000, unless earlier terminated as provided in this
Agreement.
Salary You will receive an annual salary of $48,000 from the Closing
Date, payable in accordance with the Company's payroll policies.
Benefits You are eligible for participation in the Company's generally
applicable benefit plans and programs (including its 401(k) Plan)
to the extent you satisfy their terms for participation.
Expenses The Company will make available to you, on an as needed and
as mutually agreed basis, office space, secretarial assistance,
and supplies for the direct performance of your services to the
Company. It will pay or reimburse you for reasonable business
expenses relating to the direct performance of such services, to
limits to be mutually agreed in advance, upon proper and timely
substantiation.
Options You are receiving options for the Common Stock of the Company
in consideration for services as an employee of the Company.
Option Your options will cover 7.5% of the Company's outstanding
common stock determined as of the Distribution Date (excluding the
stock under the Company's initial public offering), with no
anti-dilution provisions in the event of issuance of additional
shares of
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 1
common stock (other than with respect to stock splits or reverse
stock splits).
Term Your option will expire ten years from the Closing Date.
Price Your option will have a per share exercise price equal to the
offering price in the Company's initial public offering, or if no
initial public offering commences on the Closing Date, at the fair
market value of the Company's common stock, as determined under
the Company's option plan, for the date of grant.
Schedule Your option will be fully vested when granted, but may not be
exercised until the first anniversary of the Closing Date.
Your option will become exercisable before that first anniversary
if and to the extent that the Company accelerates the
exercisability of the options for substantially all management
optionholders.
All unexercised portions of your options will expire if, as
finally determined by a court, you violate the No Competition
provision.
Disgorging If a court finds that you violated the No Competition
Option provision, you agree that your unexercised options are
Gain retroactively forfeited as of the date of the violation and
that, if you have exercised the options since the violation began,
you will promptly pay the Company any Option Gain, net of any
taxes actually paid on the options. For purposes of this
Agreement, the "Option Gain" per share you received on exercise of
options on or after the violation is
Stock for stock you have sold, the greater of (i) the
Sold spread between closing price on the date of
exercise and the exercise price paid ("Exercise
Spread") and (ii) the spread between the price at
which you sold the stock and the exercise price
paid, and
Stock for stock you have retained, the greater of (i)
Retained Exercise Spread and (ii) the spread between the
closing price on the date of the court's final
determination and the exercise price paid.
All unexpired options will vest and be exercisable at your death.
Termination The Company can terminate your employment under this
Agreement only for "cause." "Cause" means your (i) conviction of
or guilty or nolo contendere plea to a felony demonstrably and
materially injurious to the Company's business, and resulting in a
sentence of imprisonment, or (ii), as finally determined by a
court, violation of the No Competition provision as it applies to
the Company, provided that the Company will give you 10 days to
resolve the violation before attempting to invoke this termination
provision. For a termination under (ii), you agree to repay any
salary you received from the Company between the date of the
violation and the date of the court's determination.
Severance If your employment ends because you resign or are properly
terminated for cause, you will not receive severance or
termination pay and your salary will end. Except to the extent the
law or the terms of an applicable plan requires otherwise, neither
you nor your beneficiary or estate will have any rights or claims
under this Agreement or otherwise to receive severance or any
other compensation or to participate in any other plan,
arrangement, or benefit, after your termination of employment,
other than with respect to your options.
No Consistent with certain of your prior obligations to USOP,
Competition you will not, until after the end of the Restricted Period, for
any reason whatsoever, directly or indirectly, for yourself or on
behalf
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 2
of or in conjunction with any other person, persons, company,
partnership, corporation, or business of whatever nature:
Competition (i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as
an employee, independent contractor, consultant, or advisor, or as
a sales representative, in any business (other than an Excluded
Business, as defined below) selling any products or services in
direct competition with the Company within 100 miles of where the
Company or where any of the Company's subsidiaries or affiliates
regularly maintains any of its or their offices with employees
(the "Territory"), where "products or services" are determined for
this clause with respect to products or services offered on or
before January 13, 1998 by the Company and/or any of its
subsidiaries or the predecessor companies combined to form the
Company in connection with Distribution and where the geographic
limitation is determined with reference to the Company and its
subsidiaries and not to USOP or the other Spincos (e.g.,
competition with respect to the Company is determined by reference
to the location where the Company or its subsidiary has an office
with employees and not to the locations of offices of other
Spincos);
Employees (ii) call upon any person who is, at that time, within the
Territory, an employee of the Company (including the respective
subsidiaries and/or affiliates thereof) in a managerial capacity
for the purpose or with the intent of enticing such employee away
from or out of the Company's employ (including the respective
subsidiaries and/or affiliates thereof) other than a member of
your immediate family; or
Customers (iii) call upon any person or entity that is, at that time,
or that has been, within one year prior to that time, a customer
of the Company (including the respective subsidiaries and/or
affiliates thereof) within the Territory for the purpose of
soliciting or selling products or services in direct competition
with the Company (including the respective subsidiaries and/or
affiliates thereof) within the Territory other than on behalf of
an Excluded Business.
For purposes of this Agreement, the "Restricted Period" ends, on
the later of the second anniversary of the Closing Date and the
date one year after you leave employment with the Company and its
subsidiaries and affiliates.
For purposes of this Agreement, the "Excluded Businesses" are the
following:
(i) any electrical contracting business that, at the time of
its creation or acquisition and at all later times, derives
more than 50% of its revenues from electrical contracting and
maintenance services, without regard to whether it would
otherwise violate the No Competition clause because it is
engaged in a business directly competitive with the Company
or any of its subsidiaries (together, "Aztec"), provided that
this exclusion does not permit the business to engage in any
of the lines of business described under "Consulting and
Engineering Services," "Systems and Network Design and
Implementation Services," and "Software Development and
Implementation Services" in the Aztec Form S-1 filed on June
3, 1998 (the "Aztec Specified Businesses") other than as
provided under (ii) or (vi) in the Excluded Businesses;
(ii) any business whose revenue from activities that compete
with Aztec and its subsidiaries, at the time of the
business's creation or acquisition and at all later times, is
less than $15 million per year, provided that this exclusion
does not permit the business to engage in the Aztec Specified
Businesses other than (i) as provided under (vi) in the
Excluded Businesses or (ii) through the pending
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 3
CCC acquisitions of National Network Systems in Denver,
Colorado and of Chamber Electronics Communications in
Phoenix, Arizona;
(iv) any business engaged, and only to the extent that it is
so engaged, in the business of selling, supplying, or
distributing janitorial or sanitary products or services;
(v) any business engaged, and only to the extent it is so
engaged, in the managing or servicing of office equipment
(other than computers);
(vi) any business engaged, and only to the extent it is so
engaged, in providing internet access services and activities
supportive of such services;
(vii) UniCapital Corporation's business as described in its
prospectus as of the date of this Agreement; and
(viii) U.S. Marketing Services Inc's ("USM") shelf-stocking
and merchandising, and point of purchase display creation and
incentive marketing businesses, as described in its
registration statement filed on the date of this Agreement,
so long as you are solely an investor in USM and not an
officer, director, or employee of, or consultant to, USM;
provided, however, that your service as a director will not
violate the foregoing requirement as long as you cease to be
a director no later than the 90th day after the effective
date of the registration of USM's initial public offering;
provided, that in each case you are engaged in suchbusiness
only in a policy making role and not in the entity's business
in a manner that would involve you in direct personal
competition with the Company (and its subsidiaries), provided
further that this proviso does not prevent your activities in
furtherance of acquisitions of Excluded Businesses, and
provided further that you will comply with your fiduciary
duties as a director of the Company in connection with the
Excluded Businesses.
To the extent permitted by your obligations to the relevant
Excluded Business, as an employee and/or director of the Company
(or its subsidiaries), you will inform the relevant entity of any
opportunities for it associated with any of the Excluded
Businesses.
In addition to (and not in lieu of) the restriction contained in
the Employees clause above, you agree that, during the period that
the restrictions contained in this No Competition provision remain
in effect, and so long as you are employed by, or otherwise
affiliated with, CCC, you will not, directly or indirectly, offer
employment with CCC to, or otherwise allow CCC to employ, any
person who
is employed by the Company or a subsidiary of the Company at
the time; or
was so employed by the Company or a subsidiary of the Company
within one year prior to such time.
Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit you from acquiring capital stock in CCC or any
Excluded Business or serving as an officer, director or employee
or consultant to CCC, or acquiring as an investment not more than
one percent (1%) of the capital stock of a competing business,
whose stock is traded on a national securities exchange or
over-the-counter, provided that such actions do not otherwise
breach your obligations hereunder; and provided further that
actions of CCC after you have ceased to be a director, officer,
and employee of CCC will not constitute a breach of this covenant,
despite your continued stock ownership, so long as you are not
then directly assisting any competitive actions.
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 4
Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and
because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate
remedy, you agree that the Company may enforce the No Competition
provisions by injunctions and restraining orders.
You and the Company agree that you will not be in violation of the
No Competition provisions by virtue of your investment in or other
relationship to USOP, any of the Spincos, or their respective
subsidiaries, even if one of those entities engages in direct
competition with another. You and the Company agree that CCC's
acquisition or retention of Xxxxxx Electric Company, Inc.
("Xxxxxx") and Xxxxxx'x engaging in any lines of business in place
as of the Closing Date do not violate the No Competition
provision.
You and the Company agree that the No Competition provisions
impose a reasonable restraint on you in light of the Company's
activities and business (including the Company's subsidiaries
and/or affiliates) on the date of the execution of this Agreement.
The Company agrees to consider reasonably and within two weeks of
receipt any requests you make for a waiver from the No Competition
provisions for a particular acquisition.
You and the Company further agree that, if you enter into a
business or pursue other activities not in competition with the
Company (including the Company's subsidiaries), or similar
activities or business in locations the operation of which, under
such circumstances, does not violate the Competition clause of
this No Competition provision, and in any event such new business,
activities, or location is not in violation of this No Competition
provision or of your obligations under this No Competition
provision, if any, you will not be chargeable with a violation of
this provision if the Company (including the Company's
subsidiaries) shall thereafter enter the same, similar, or a
competitive (i) business, (ii) course of activities, or (iii)
location, as applicable.
The covenants in this No Competition provision are severable and
separate, and the unenforceability of any specific covenant does
not affect the provisions of any other covenant. Moreover, if any
court of competent jurisdiction shall determine that the scope,
time, or territorial restrictions set forth are unreasonable, then
it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable,
and the Agreement shall thereby be reformed.
All of the covenants in this No Competition provision shall be
construed as an agreement independent of any other provision in
this Agreement, and the existence of any claim or cause of action
by you against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by
the Company of such covenants. It is specifically agreed that the
Restricted Period, during which your agreements and covenants made
in this provision shall be effective, is computed by excluding
from such computation any time during which you are in violation
of any provision of the No Competition provision.
Notwithstanding any of the foregoing, if any applicable law
reduces the time period during which you are prohibited from
engaging in any competitive activity described in this provision,
you agree that the period for prohibition shall be the maximum
time permitted by law.
You specifically agree that USOP and the Company have provided you
with sufficient consideration for the enforcement of the No
Competition obligations for the Restricted Period and for the
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 5
assumption of such benefits by the Company. You specifically
consent to USOP's assignment to the Company of the right to
enforce the No Competition provisions of the Amended Ledecky
Services Agreement, as those provisions are incorporated in this
Agreement.
Other The Company acknowledges that you are also employed by CCC,
Employment USOP, and the Other Spincos, and agrees that such dual employment
does not breach this Agreement, unless and to the extent that you
thereby violate the No Competition provisions.
Return of All records, designs, patents, business plans, financial
Company statements, manuals, memoranda, lists and other property
Property delivered to or compiled by you by or on behalf of the Company
(including the respective subsidiaries thereof) or their
representatives, vendors, or customers that pertain to the
business of the Company (including the respective subsidiaries
thereof) shall be and remain the property of the Company, and be
subject at all times to its discretion and control. Likewise, you
will make reasonably available at the Company's request during
business hours all correspondence, reports, records, acquisition
materials, charts, advertising materials and other similar data
pertaining to the business, activities, or future plans of the
Company that you have collected or obtained.
Trade Secrets You agree that you will not, during or after the term of this
Agreement with the Company, disclose the specific terms of the
Company's (including the respective subsidiaries thereof)
relationships or agreements with its or their respective
significant vendors or customers or any other significant and
material trade secret of the Company (including the respective
subsidiaries thereof) whether in existence or proposed, to any
person, firm, partnership, corporation or business for any reason
or purpose whatsoever. For CCC or any other businesses with which
you are affiliated or in which you are a stockholder, you may
reach agreement on comparable terms with significant vendors to
the Company, so long as you do not provide copies of or otherwise
disclose the specific terms of the Company's relationships or
agreements.
Indemnification If you are made a party to any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by the
Company against you), by reason of the fact that you are or were
performing services under this Agreement then the Company must
indemnify you against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, as actually and
reasonably incurred by you in connection therewith to the fullest
extent provided by Delaware law and in accordance with the
Company's Bylaws.
No Prior You hereby represent and warrant to the Company that your
Agreements execution of this Agreement, your services to the Company, and the
performance of your agreements hereunder will not violate or be a
breach of any agreement with a former or current employer, client,
or any other person or entity. Further, you agree to indemnify the
Company for any claim, including, but not limited to, attorneys'
fees and expenses of investigation, by any such third party that
such third party may now have or may hereafter come to have
against the Company based upon or arising out of any
non-competition agreement, invention, or secrecy agreement between
you and such third party that was in existence as of the date of
this Agreement.
Complete This Agreement is not a promise of future employment. You
Agreement have no oral representations, understandings, or agreements with
the Company or any of its officers, directors, or representatives
covering the same subject matter as this Agreement. This written
Agreement is the final, complete, and exclusive statement and
expression of the agreement between the Company and you with
respect to all the terms of this Agreement, and it cannot be
varied, contradicted, or supplemented
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 6
by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of
the Company and you, and no term of this Agreement may be waived
except by writing signed by the party waiving the benefit of such
term.
Notice Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: Aztec Technology Partners, Inc.
Attention: Chief Executive Officer
00 Xxxxxx Xx
Xxxxxx, XX 00000
To Employee: Xxxxxxxx X. Xxxxxxx
0000 00xx Xx., X.X.
Xxxxxxxxxx, X.X. 00000
Notice shall be deemed given and effective three days after the
deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when
actually received. Either party may change the address for notice
by notifying the other party of such change in accordance with
this Notice provision.
Severability If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible,
effect shall be given to the intent manifested by the portion held
invalid or inoperative. This severability provision shall be in
addition to, and not in place of, the comparable provisions in the
No Competition provision.
Governing Law This Agreement shall in all respects be construed
according to the laws of the State of Delaware, other than those
relating to conflicts of laws. Any decision as to breaches of this
Agreement or any provision herein shall be made pursuant to a
final, nonappealable decision of a court.
Binding This Agreement binds and benefits the Company, each of its
Effect and successors or assigns, and your heirs and the personal
Assignment representatives of your estate. Without the Company's prior
written consent, you may not assign or delegate this Agreement or
any or all rights, duties, obligations, or interests under it.
Superseding Contingent upon the Closing and effective only in that event,
Effect this Agreement supersedes any prior oral or written employment or
severance agreements between you and the Company (specifically
excluding your options to purchase Company stock). Except as set
forth above, this Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements, and
writings with respect to the subject matter of this Agreement. All
such other negotiations, commitments, agreements, and writings
will have no further force or effect; and the parties to any such
other negotiation, commitment, agreement, or writing will have no
further rights or obligations thereunder.
Negotiated You agree that you have consulted with counsel of your own
Agreement selection and have negotiated the terms of this Agreement with the
Company. You and the Company agree that this Agreement should not
be construed against either party as the "drafter."
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 7
AZTEC TECHNOLOGY PARTNERS, INC.
Date: June 9, 1998 By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
President and Chief Executive Offier
I agree to and accept these terms, specifically including the assignment of the
No Competition provision.
Date: /s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxxx
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Employment Agreement between Aztec and Xxxxxxxx X. Xxxxxxx PAGE 8
