EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as
of February 1, 1997 by and between _____________________________ ("Employee")
and Wyle Electronics, a California corporation (the "Company").
The parties agree as follows:
1. Employment.
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1.1 Title & Duties. The Company hereby employs Employee, and Employee
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hereby accepts employment, as _________________________ of the Company. Employee
shall be given duties consistent with such offices and positions. There shall be
no change in Employee's titles or duties without the mutual consent of the
Company and Employee.
1.2 Place. Employee shall not be required to perform any duties as
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described in section 1.1 at any place other than in the County of Orange, State
of California, except insofar as his duties shall require reasonable business
trips and/or visits to suppliers or customers or Company facilities.
2. Extent of Services; Noncompetition.
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2.1 General. It is recognized that the services to be rendered by
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Employee are of such a nature as to be peculiarly rendered by Employee,
encompass the individual ability of Employee and cannot be measured exclusively
in terms of hours or services rendered in any particular period. Employee agrees
to devote his full time and best efforts to the performance of his duties and
exclusively to advance the interests of the Company.
2.2 Vacation. Employee shall be entitled to such vacations and other
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absences from work as shall be reasonably consistent with the performance of his
duties as provided in this Agreement.
2.3 Noncompetition.
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(a) Employee agrees that during the term of this Agreement (as
defined in Section 3 below) he will neither directly nor indirectly
engage in a business competing with any of the businesses conducted by
the Company or any of its subsidiaries or affiliates, nor without the
prior written consent of the Board of Directors of the Company directly
or indirectly have any interest in, own, manage, operate, control, be
connected with as a stockholder, joint venturer, officer, employee,
partner or consultant, or otherwise engage, invest or participate in any
business which is competitive with any of the businesses conducted by the
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Company or by any subsidiary or affiliate of the Company; provided,
however, that nothing contained in this section 2.3 shall prevent
Employee from investing or trading in stocks, bonds, commodities,
securities, real estate or other forms of investment for his own account
and benefit (directly or indirectly), so long as such investment
activities do not significantly interfere with Employee's services to be
rendered hereunder and are consistent with the conflict of interest
provisions contained in the Company's Business Ethics Policy as it exists
from time-to-time.
(b) Employee agrees that should his or her employment by the Company
terminate for any reason, Employee (and any corporation or entity of
which he or she is then a director, officer, employee, or greater than 5%
shareholder) shall not for a period of one year after such termination:
(1) solicit for employment and then employ any employee of the
Company or any of its affiliates or subsidiaries or any person who is
an independent contractor involved in sales or manufacture of products
sold or manufactured by the Company or any of its affiliates or
subsidiaries; or
(2) make any public statement concerning the Company, any of
its affiliates or subsidiaries, or Employee's employment by the
Company unless such statement is previously approved by the Board of
Directors of the Company, except as may be required by law; or
(3) induce, attempt to induce or knowingly encourage any
Customer of the Company or any of its affiliates or subsidiaries to
divert any business or income from the Company or any of its
affiliates or subsidiaries or to stop or alter the manner in which
they are then doing business with the Company or any of its affiliates
or subsidiaries. "Customer" shall mean any individual or business firm
that was or is a customer or client of, or one that was or is a party
in a selling agreement with, or whose business was actively solicited
by, the Company or any of its affiliates or subsidiaries at any time,
regardless of whether such customer was generated, in whole or in
part, by Employee's efforts.
3. Term. The term of this Agreement (the "Term") shall commence on the date
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hereof and shall end on the later of (a) the third (3rd) anniversary of the date
of this Agreement, or (b) three (3) years following the effective date on which
notice of non-renewal or termination of this Agreement is given to the other by
either the Employee or the Company. Thus, this
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Agreement shall be renewed automatically on a daily basis so that the
outstanding Term is always three (3) years following the effective date of any
notice of non-renewal or notice of termination given by the Company or the
Employee pursuant to Section 6.1.
4. Compensation.
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4.1 Cash Compensation. The Company shall compensate Employee for
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services rendered under this Agreement in an amount of not less than Employee's
"Cash Compensation", as defined below, per year, as determined from time to time
by the Board of Directors. Employee shall be considered in the Company's annual
review of executive compensation and he shall be a participant in the Company's
executive bonus plans as may be in effect from time-to-time. All cash
compensation paid to Employee under this Agreement shall be considered for
purposes of meeting the requirement described in this paragraph, whether in the
form of annual compensation or in the form of bonuses.
"Cash Compensation" shall mean base salary $___________ plus (i) if the
applicable target(s) relating to Employee's target bonus is achieved for any
year, an amount equal to one-half (1/2) of Employee's target bonus for that
year, or (ii) if the applicable target(s) relating to Employee's target bonus is
not achieved for that year, an amount equal to the lesser of Employee's actual
bonus for that year or one-half (1/2) of Employee's target bonus for that year.
Base Salary shall be determined in the discretion of the Board of Directors.
4.2 Employee Benefits. Employee shall be entitled to receive fringe
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benefits consistent with Employee's duties and position, which benefits shall
(except as specified below) be no less than those to which he is entitled as of
the date hereof, including but not limited to all plans of life, accident and
health, salary continuation and other insurance which is or becomes generally
available to other employees, officers or executives of the Company and
participation in the Company's Retirement Plan. Employee shall be provided with
the full time use of an automobile consistent with the Company's corporate
policy on automobiles as in effect from time to time. The Company reserves the
right to modify, suspend or discontinue any and all of its fringe benefits
referred to in this Section 4.2 at any time without recourse by Employee so long
as such action is taken generally with respect to other similarly situated peer
executives and does not single out Employee.
4.3 Expenses. Employee shall be reimbursed for all expenses reasonably
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incurred in the furtherance of the business of the Company. Employee shall keep
complete and accurate records of all expenditures such that Employee may fully
account to the Board of Directors, if requested, or as may then be required by
the Internal Revenue Service.
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5. Confidential Information.
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5.1 General. Employee acknowledges that during his employment by, and
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as a result of his relationship with, the Company he will obtain knowledge of
and gain access to information regarding the Company's business, operations,
products, proposed products, production methods, processes, customer lists,
advertising, marketing and promotional plans and materials, price lists, pricing
policies, financial information and other trade secrets, confidential
information and material proprietary to the Company or designated as being
confidential by the Company which is not generally known to non-Company
personnel, including information and material originated, discovered or
developed in whole or in part by Employee (collectively referred to herein as
"Confidential Information"). Employee agrees that during the term of this
Agreement and, to the fullest extent permitted by law, thereafter, he will, in a
fiduciary capacity for the benefit of the Company, hold all Confidential
Information strictly in confidence and will not directly or indirectly reveal,
report, disclose, publish or transfer any of such Confidential Information to
any person, firm or other entity, or utilize any of the Confidential Information
for any purpose, except in furtherance of his employment under this Agreement.
5.2 Return of Materials. Employee agrees that upon the expiration or
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earlier termination of this Agreement, he will immediately surrender and return
to the Company all lists, books, records and other Confidential Information of
the Company, or obtained in connection with the Company's business, it being
expressly acknowledged by Employee that all such items are the exclusive
property of the Company, and all other property belonging to the Company then in
the possession of Employee, and Employee shall not make or retain any copies
thereof.
6. Termination Prior to Expiration of Term. Employee's employment, and his
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rights under this Agreement, may be terminated prior to the expiration of the
Term of this Agreement (as provided in section 3 hereof) only as provided in
this section 6.
6.1 Discharge or Resignation.
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(a) Employee may be discharged prior to the expiration of the term
of this Agreement (1) for "Just Cause"; or (2) upon 60 days written notice,
even if "Just Cause" does not exist.
(b) For a discharge which occurs prior to a "Change in Control," as
defined herein, "Just Cause" shall mean that the Company, acting in good
faith based upon the information then known to the Company, determines that
Employee has: (1) committed a material breach of his duties
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and responsibilities to the Company (other than as a result of incapacity due
to the Employee's disability); or (2) been convicted of a crime involving
moral turpitude; or (3) refused to perform his required duties and
responsibilities or performed them incompetently; or (4) violated any
fiduciary duty owed to the Company; or (5) taken actions which are injurious
to the Company and which involve moral turpitude or actual malice towards the
Company. For a discharge which occurs coincident with or after a "Change in
Control," "Just Cause" means (x) Employee's conviction of a crime involving
moral turpitude; or (y) actions of Employee which are injurious to the
Company and involve moral turpitude or actual malice toward the Company.
(c) Employee may resign prior to the term of this Agreement (1) for
"Good Reason"; or (2) upon 60 days written notice, even if "Good Reason" does
not exist. Regardless of whether a resignation occurs prior to, coincident
with or after a "Change in Control," "Good Reason" shall mean the material
failure by the Company to fulfill its obligations under this Agreement, to
the extent not remedied in a reasonable period of time after receipt of
written notice by the Employee specifying the material failure by the
Company. Any reduction or attempted reduction of compensation or benefits
below that required by Section 4 is deemed material. For a resignation which
occurs coincident with or following a Change in Control, "Good Reason" shall
also mean the failure by the Company or its successors to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if a succession had not
occurred.
(d) (1) If Employee is discharged for "Just Cause" or resigns
without "Good Reason," the Company shall not be obligated to pay the
Employee any sums of money other than all compensation and benefits due
employee as of the date of discharge or resignation and the bonus (if
any) for the period of his employment prior to the discharge or
resignation.
(2) If employee is discharged without "Just Cause" or resigns
for "Good Reason," Employee shall be entitled to the following:
(i) all compensation and benefits due Employee as of the
date of discharge or resignation and the bonus for the period of
employment prior to the discharge or resignation; plus
(ii) A lump sum payment equal to the present value of the
compensation which would be
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received by Employee (using the greater of (A) the Employee's
highest annual amount of compensation during any of the preceding
three years regardless of whether this Agreement was in force
during such year, or (B) the Employee's base salary and full target
bonus for the year in which the Employee's resignation or discharge
occurs) for the remaining Term of this Agreement. The present value
shall be determined by using the applicable federal mid-term rate,
compounded monthly, as determined under Section 1274(d) of the
Internal Revenue Code of 1986, as amended (the "Code"), or its
successor, as of the date of discharge or resignation. The entire
lump-sum amount shall be paid within 30 days of the effective date
of resignation or discharge. Employee shall have no duty to
mitigate or attempt to mitigate his damages.
(e) (1) Notwithstanding anything to the contrary in this Agreement,
payments to the Employee which constitute "parachute payments," as defined
in Section 280G of the Code, shall be limited, if necessary, so that the
maximum amount of such payments to the Employee shall be one dollar
($1.00) less than the amount which would cause the payments to the
Employee (including payments to the Employee which are not included in
this Agreement) to be subject to the excise tax imposed by Section 4999 of
the Code.
(2) Any determination that payments to the Employee must be
limited and the assumptions to be utilized in arriving at such
determination, shall be made by Xxxxxx Xxxxxxxx and Company (the
"Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Employee within 15 business days of the time
such calculation is requested by the Company or the Employee. In the event
that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Employee
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. If the
Accounting Firm determines that payments to the Employee shall be limited,
it shall furnish the Employee with written opinion that failure to limit
the payments would result in the imposition of a tax under Section 4999 of
the Code. Any determination by the Accounting Firm shall be binding upon
the Company and the Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of
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the initial determination by the Accounting Firm hereunder, it is possible
that payments to the Employee which will not have been made by the Company
should have been made ("Underpayment"). The Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit
of the Employee. In the event that any payment made to the Employee shall
be determined by the Accounting Firm to result in the imposition of any
tax under Section 4999 of the Code, the Employee shall promptly reimburse
the Company for the amount of such excess together with interest on such
amount (at the same rate as is applied to determine the present value of
payments under Section 280G or any successor thereto), from the date the
reimbursable payment was received by the Employee to the date the same is
repaid to the Company. The parties hereto acknowledge and agree that the
amount of any such reimbursement shall be deemed never paid to the
Employee.
(f) For purposes of this Agreement; a "Change of Control" shall be deemed
to have occurred if (1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, or securities of the Company representing
30% or more of the combined voting power of the Company's then outstanding
securities; or (2) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of the
Company (the "Board") cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the Company's
shareholders, of each new Board member was approved by a vote of at least
three-fourths of the Board members then still in office who were Board members
at the beginning of such period.
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6.2 Disability. If the Company in good faith determines that the Employee
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has become ill or injured and such illness or injury will prevent Employee from
performing the services required under this Agreement for a period of more than
12 consecutive months on substantially a full time basis, the Company may give
Employee written notice that it intends to terminate the employment of Employee.
Such termination of employment shall become effective 30 days after receipt of
such notice by Employee, provided that, within 30 days after such receipt,
Employee shall not have returned to full time performance of his duties. If
Employee's employment is so terminated, Employee shall be entitled to receive
his full compensation and benefits until the expiration of 12 months from the
date on which he was first unable to substantially perform his duties hereunder.
6.3 Death. The death of Employee shall result in automatic termination of
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this Agreement, and the Company shall not be obligated to pay the estate or
personal representative of Employee any sums of money other than any and all
compensation and benefits due Employee at the date of his death and bonus for
the period of his employment prior to death.
7. Arbitration.
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7.1 General. Any dispute, controversy or claim arising out of or
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relating to this Agreement, the breach hereof or the coverage or enforceability
of this arbitration provision shall be settled by arbitration in Los Angeles
County, California, conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, as such rules are in effect in
Los Angeles on the date of delivery of demand for arbitration. The arbitration
of any such issue, including the determination of the amount of any damages
suffered by either party hereto by reason of the acts or omissions of the other,
shall be to the exclusion of any court of law. Notwithstanding the foregoing,
either party hereto may seek any provisional remedy in a court, including but
not limited to an action for injunctive relief or attachment, without waiving
the right to arbitration.
7.2 Procedure. There shall be three arbitrators, one to be chosen by
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each party at will within 10 days from the date of delivery of demand for
arbitration and the third arbitrator to be selected by the two arbitrators so
chosen. If the two arbitrators are unable to select a third arbitrator within 10
days after the last of the two arbitrators is chosen by the parties, the third
arbitrator will be designated, on application by either party, by the American
Arbitration Association. The decision of a majority of the arbitrators shall be
final and binding on both parties and their respective heirs, executors,
administrators, personal representatives, successors and assigns. The Company
shall have the burden of proving Just Cause for any
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discharge of Employee under section 6.1 hereof; for a resignation which occurs
prior to a Change in Control, the Employee shall have the burden of proving Good
Reason, and for a resignation which occur after a Change in Control, the Company
shall have the burden of proving that Good Reason did not exist. Judgment upon
any award of the arbitrators may be entered in any court having jurisdiction, or
application may be made to any such court for the judicial acceptance of the
award and for an order of enforcement.
7.3 Costs and Expenses. The Company shall pay the fees of all
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arbitrators, witnesses and such other expenses as may be generated by the
arbitration, except Employee's attorneys fees, unless a majority of the
arbitrators concludes that such arbitration procedure was not instituted in good
faith by Employee. In such event the arbitrators shall be empowered to allocate
fees and assess costs and other expenses of the arbitration, except attorneys
fees, as they may deem appropriate, bearing in mind the relative financial
abilities of the parties and the respective merits of their positions.
8. Non-Assignment. This Agreement shall not be assignable nor the duties
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hereunder delegable by Employee. None of the payments hereunder may be
encumbered, transferred or in any way anticipated. The Company shall not assign
this Agreement nor shall it transfer all or any substantial part of its assets
without first obtaining in conjunction with such transfer the express assumption
of the obligations hereof by the assignee or transferee.
9. Remedies. Employee acknowledges that the services he is to render under
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this Agreement are of a unique and special nature, the loss of which cannot
reasonably or adequately be compensated for in monetary damages, and that
irreparable injury and damage will result to the Company in the event of any
default or breach of this Agreement by Employee. Because of the unique nature
of the Confidential Information, Employee further acknowledges and agrees that
the Company will suffer irreparable harm if Employee fails to comply with his
obligations in section 5 hereof and that monetary damages would be inadequate to
compensate the Company for such breach. Accordingly, Employee agrees that the
Company will, in addition to any other remedies available to it at law, in
equity or, without limitation, otherwise, be entitled to injunctive relief
and/or specific performance to enforce the terms, or prevent or remedy the
violation, of any provisions of this Agreement. This provision shall not
constitute a waiver by the Company of any rights to damages or other remedies
which it may have pursuant to this Agreement or otherwise.
10. Survival. The provisions of sections 5, 7 and 9 shall survive the
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expiration or earlier termination of this Agreement.
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11. Notices. Any notices or other communications relating to this Agreement
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shall be in writing and delivered personally or mailed by certified mail, return
receipt requested, to the party concerned at the address set forth below:
If to Company: Wyle Electronics
00000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Senior Vice President
If to Employee: At his residence address as maintained by the Company in
the regular course of its business for payroll purposes.
Either party may change the address for the giving of notices at any time by
notice given to the other party under the provisions of this section 11.
12. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior written and oral and all
contemporaneous oral agreements (including Employee's prior Employment Agreement
with the Company dated January 1, 1995), understandings and negotiations with
respect to the subject matter hereof. This Agreement may not be changed orally,
but only by an agreement in writing signed by both parties.
13. Construction. This Agreement shall be governed under and construed in
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accordance with the laws of the State of California. The paragraph headings and
captions contained herein are for reference purposes and convenience only and
shall not in any way affect the meaning or interpretation of this Agreement. It
is intended by the parties that this Agreement be interpreted in accordance with
its fair and simple meaning, not for or against either party, and neither party
shall be deemed to be the drafter of this Agreement.
14. Severability. If any portion or provision of this Agreement is
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determined by arbitration or by a court of competent jurisdiction to be invalid,
illegal or unenforceable, the remaining portions or provisions hereof shall not
be affected.
15. Binding Effect. The rights and obligations of the parties under this
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Agreement shall be binding upon and inure to the benefit of the permitted
successors, assigns, heirs, administrators, executors and personal
representatives of the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
in the year first written above.
WYLE ELECTRONICS
By: ______________________________________
Xxxxxxx X. Xxxxxxx
Its: Senior Vice President
EMPLOYEE
__________________________________________
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