EXHIBIT 10
9/18/96
EMPLOYMENT AGREEMENT
This is an agreement between Mail Boxes Etc. USA, Inc. ("MBE") and Xxxxx X.
Xxxx, Xx. ("Xxxx") to be effective as of September 19, 1996 ("Effective Date").
The purpose of this agreement is to set forth the terms and conditions under
which Xxxx will be employed by MBE.
1. Term of Employment. MBE will employ Xxxx for a definite period of time
beginning on the Effective Date, and continuing through September 30, 1997.
The employment may be terminated before September 30, 1997, only if there is
good cause for termination or if there is a sale or merger of MBE. "Good
cause for termination" is limited to intentional misconduct, gross negligence,
insubordination, dishonesty, or inability or refusal to perform your duties.
The employment will automatically continue on and after October 1, 1997
(unless, before then, the employment has been terminated for good cause or
due to a sale or merger) on an "at will" basis unless and until either MBE
or Xxxx tender to the other a written notice of termination, which notice
will be tendered at least 30 days before the effective date of the termination.
As is more fully set forth in the MBE Employment Handbook, "at will" employment
means employment with the Company is entered into voluntarily for no definite
period of time. Therefore, when employment with MBE is "at will," Xxxx is free
to resign at any time for any reason and, similarly, MBE is free to conclude
the employment relationship at any time for any reason. If, at any time after
September 30, 1997, the employment is terminated by MBE for any reason other
than good cause for termination (as defined above) or a sale or merger of MBE, \
then MBE will continue to pay to Xxxx his base salary set forth below, and
will continue to provide medical insurance coverage (under the then-existing
terms of MBE's medical insurance plan), for six months after the date of such
termination.
2. Title and Responsibilities. While employed by MBE, Xxxx will have the
title of President and Chief Operating Officer, and he will have responsibility
for the general management of the operations of MBE and the MBE Network.
3. Reporting. Xxxx will report directly to X. X. XxXxx, Chief Executive
Officer, or as otherwise directed.
4. Salary. MBE will pay to Xxxx a base salary of $220,000 per year. In
addition, for the duration of his employment by MBE, Xxxx will be considered
for annual bonuses and stock options (in addition to those set forth below)
based on the same criteria as other officers of MBE.
5. Benefits. MBE will provide Xxxx the same "perks" that MBE provides to
other officers of MBE, including but not limited to vacation and sick leave,
participation in MBE's profit sharing plan, health plan, and 401(k) plan, and
the use of a Company van under the same terms and conditions as those
applicable to other officers of MBE.
6. Stock Options.
a. Subject to the terms and conditions of the Mail Boxes Etc. 1995
Employee Stock Option Plan ("Stock Option Plan"), Xxxx will be granted an
initial option to purchase 50,000 shares of MBE common stock with an exercise
price equal to the NASDAQ price per share at closing on the Effective Date
(the "Option Price"). The options shall vest over a four year period at
twenty-five percent (25%) per year on October 1, 1997, October 1, 1998,
October 1, 1999, and October 1, 2000, respectively, provided Xxxx is currently
employed by MBE on those dates, except that the options scheduled to vest on
October 1, 1997 shall vest on that date if Xxxx is employed on September 30,
1997. In addition, as set forth in the Stock Option Plan, the stock options
may be exercised only if Xxxx is employed by MBE on the date of exercise or may
be exercised within 90 days after the date of termination of employment.
b. In addition, in the event an agreement for the sale or merger of MBE
is entered into prior to September 30, 2000, then all of Xxxx' options shall
immediately vest and become exercisable as provided in the Plan, provided that
either (i) Xxxx is then employed by MBE or (ii) the employment of Xxxx
terminated no more than 90 days before the public announcement of the sale or
merger of MBE.
7. Sale or Merger of MBE.
a. In the event that a sale or merger of MBE occurs or is publicly
announced prior to October 1, 1998, Xxxx will have, in addition to the options
set forth above, a nonqualified option to purchase for the Option Price, as
defined above, 25,000 shares of common stock. This option will vest on the
day on which there is a public announcement of such sale or merger, and may
be exercised at any time from that day until the time of the sale or merger,
at which time the option provided by this paragraph will terminate.
b. If Xxxx' employment is terminated solely due to a sale or merger of
MBE within the first 24 months, MBE will continue to pay to Xxxx his base salary
set forth above, and will continue to provide medical insurance coverage (under
the then-existing terms of MBE's medical insurance plan), for one year after the
date of such termination.
8. Housing. MBE will pay the rent for a home to be leased by Xxxx in San
Diego until June 30, 1997, or until Xxxx xxxxx his home in Plano, Texas,
whichever occurs first; provided, however, that MBE shall not be obligated
to pay more than $2,500 per month in rent pursuant to this paragraph.
9. Moving Expenses. MBE will pay reasonable expenses incurred to move Xxxx
and his belongings from Plano, Texas to San Diego. Xxxx agrees to inform the
Chief Financial Officer of MBE of the amount of moving expenses to be incurred,
and to obtain his approval of the amount, before the expenses are incurred.
All relocation expenses (including but not limited to rent under Paragraph
No. 8 above) to be paid directly by MBE and all relocation expenses to
be paid initially by Xxxx but subsequently reimbursed by MBE will be "grossed
up" so that Xxxx will be made whole for any and all income-tax liability
(either state or federal or both) resulting from any such payment or
reimbursement being treated as taxable income to Xxxx.
10. Entire Agreement. The entire agreement between MBE and Xxxx is set
forth in this agreement and in the other documents and plans referenced herein,
including but not limited to the MBE Employee Handbook, the MBE Employment
Arbitration Agreement, and the Mail Boxes Etc. 1995 Employee Stock Option Plan,
and neither party is relying on any representations or warranties not set
forth in this agreement or in a document referenced herein.
To memorialize their agreement to the terms and conditions set forth above,
MBE and Xxxx now affix their signatures below.
MAIL BOXES ETC. USA, INC.
By: X.X. XxXxx
---------------------------------
A. W. ("Xxxx") XxXxx, President
and Chief Executive Officer
Xxxxx X. Xxxx, Xx.
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XXXXX X. XXXX, XX.
