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EXHIBIT 10.02
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 1st day of May, 1997 by and between
Office Centre Corporation, a Delaware corporation (hereinafter referred to as
"OCC"), with an office at Springfield, Massachusetts, and Xxxxxx X. Xxxxxx, Xx.
(hereinafter referred to as the "Executive"), residing at 000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, XX 00000.
W I T N E S S E T H:
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WHEREAS, OCC wishes to engage the services of the Executive to
serve as its president and chief executive officer; and
WHEREAS, the Executive desires to serve as the president and
chief executive officer of OCC on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties agree as
follows:
1. PERFORMANCE OF DUTIES. The Executive shall become President
and Chief Executive Officer of OCC with responsibility to manage OCC on a daily
basis. The Executive shall report directly to the Board of Directors. During the
term of Executive's employment, OCC shall (a) provide the Executive with
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a private office, secretarial help, office equipment and supplies, and such
other facilities and services, which are suitable to the Executive's position
and adequate for the performance of his duties and (b) maintain its headquarters
in Manhattan or in such other location as Executive shall approve.
2. COMPENSATION. As compensation for his services
hereunder, the Executive shall receive:
(a) An annual salary equal to $250,000 per year,
such amount to be paid to the Executive semi-monthly starting
May 1, 1997;
(b) A yearly salary review by the Board of Directors
to determine if said annual salary shall be increased, but in
no event shall said salary be decreased;
(c) A yearly cash bonus determined by the Board of
Directors of OCC based upon the performance of OCC;
(d) A bonus upon signing this contract equal to
seventy-five thousand ($75,000) dollars and an additional
$75,000 payable on December 31, 1997;
(e) 547,430 shares of OCC stock;
(f) Options to purchase stock of OCC, the number and
price to be determined by the Board of Directors on an annual
basis, in the same proportion and on the same terms and
provisions as options granted to other shareholders and key
employees; and
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(g) In the event of a sale prior to an IPO of assets
of OCC, 12 1/2% of the profit, with profit defined as the
amount by which the consideration paid to OCC for its assets
exceeds the amount paid by OCC for its assets; the provisions
of this Section 2(g) shall survive a termination of this
agreement.
3. FRINGE BENEFITS. In addition to the provisions of Paragraph
2(a), as part of his compensation, the Executive shall be entitled to the
following fringe benefits:
(a) AUTOMOBILE ALLOWANCE. The Executive shall be entitled to
the use of a company vehicle, the make, model and year of which shall be
selected by the Executive and approved by the Board of Directors of OCC, which
approval shall not be unreasonably withheld. The Executive shall have the right
to have OCC lease on his behalf a new vehicle every three (3) years. The
Executive shall be entitled to all reasonable expenses relating to his use of
the vehicle including, but not limited to, automobile insurance, fuel, and
maintenance.
(b) LIFE INSURANCE. OCC shall expend twenty-five thousand
($25,000.00) in annual premiums to obtain an insurance policy on the life of
Executive, which policy shall be chosen by the Executive. Executive shall have
the right to designate the beneficiary thereof.
(c) SALARY CONTINUATION DURING DISABILITY. If the Executive
for any reason becomes disabled, so that he is
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unable to perform his duties hereunder in the opinion of OCC due to physical or
mental illness or other cause for either (i) a period of 90 consecutive days or
(ii) 180 days during any 360-day period ("Disabled"), the Executive's employment
under this Agreement shall terminate. OCC shall nevertheless continue to pay him
periodic salary payments that he would have been entitled to receive under
Section 2(a) until the earlier to occur of (x) the time that this Agreement
would have expired but for such termination (assuming no automatic extension
under Section 5(a)) and (y) the time that he is no longer Disabled. Until such
period of such disability shall commence, the Executive shall be entitled to
receive his regular salary payments provided he is not in default under this
Agreement.
(d) OTHER BENEFITS. The Executive shall be entitled to such
other benefits as are granted to other senior executives of OCC. In any event,
Executive will receive group insurance, similar to, and not less than, that
currently made available to Executive by his present employer, The King Group,
LLC, including life insurance, medical insurance (hospitalization, dental,
etc.).
4. EXPENSE REIMBURSEMENT. The Executive shall be entitled to
the use of a corporate phone card and credit card for business expenses and
shall be entitled to reimbursement from OCC for all reasonable out-of-pocket
business expenses incurred by him in connection with the performance of his
duties as President
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and Chief Executive Officer, subject to compliance with the OCC's rules and
practices relating to expense reimbursement.
5. DURATION AND TERMINATION OF EMPLOYMENT.
(a) Unless the Executive's employment under this Agreement
is otherwise terminated, the term of this Agreement is three (3) years from the
date first above written. Unless the Executive's employment under this Agreement
is otherwise terminated, this agreement shall automatically be extended for
further one-year terms unless either party advises the other by written notice
at least six months before the end of the then current term of its intention to
cancel the agreement.
(b) OCC may terminate the employment of the Executive for
Cause (defined herein) and notice of such termination shall be sent to
Executive. "Cause" shall mean the Executive's (i) willful misconduct, (ii)
grossly negligent misconduct in the performance of his duties to the
Corporation, (iii) material breach of his obligations under this Agreement, (iv)
failure to comply with the lawful instructions of the Board of Directors or (v)
conviction of, or plea of nolo contendere to a felony, or conviction of, or plea
of nolo contendere to, a crime involving moral turpitude under federal, state or
local laws. Notwithstanding the foregoing, a crime involving tax matters shall
not be considered a crime involving moral turpitude.
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(c) If, at any time, OCC decides, pursuant to paragraph (a)
of this Section 5, to exercise its option to cancel this agreement, it shall pay
Executive as severance an amount equal to the greater of (i) the Executive's
then current annual salary or (ii) two hundred fifty thousand ($250,000) dollars
at the time such notice is given.
(d) If, at any time, OCC terminates the employment of the
Executive for Cause, the Executive resigns his position for any reason, or the
Executive dies, the Executive (or his estate) shall be entitled to receive only
the unpaid portion of his salary which has accrued to the date of such
termination, resignation or death.
(e) If, at any time, OCC terminates the employment of the
Executive for any reason other than for Cause ("Non-Cause Termination"), the
Executive shall be entitled to receive the greater of (i) the periodic salary
payments that he would have been entitled to receive under Section 2(a) until
this Agreement would have expired but for such termination (assuming no
automatic extension under Section 5(a)); and (ii) $250,000 (or such greater
amount that is the Executive's annual salary at the time of such termination),
which amount in (e)(ii) to be paid at the time of termination. With respect to
the payments provided in subsection (e)(i) of this Section 5, the Executive
shall be entitled to receive (A) at the time of termination, a lump sum payment
equal to $250,000 (or such greater amount that is the
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Executive's annual salary at that time) in lieu of one year's periodic payments
and (B) commencing one year from the date of termination, the remaining
periodic payments to which Executive is entitled (after adjusting for the lump
sum payment referred to in (A)), such payments to be made semi-monthly. For all
purposes of this Agreement, if OCC fails to maintain its headquarters in
Manhattan, or if the Executive is not elected to OCC's Board of Directors, such
events shall be deemed to be Non-Cause Termination.
Notwithstanding anything else contained in this Agreement, if,
by July 23, 1997, OCC has not consummated a purchase of all of the capital stock
of King Office Supply Inc. ("King"), OCC shall have the right (the "Right") to
terminate the employment of the Executive under this Agreement by written notice
to the Executive with no further obligations under this Agreement; provided,
however, if the Right is exercised despite Xxxxxx Xxxxxx, in his capacity as a
stockholder of King, having negotiated in good faith to consummate such purchase
by July 23, 1997, then, upon exercise of the Right OCC shall make a lump sum
payment of $250,000 to the Executive. If OCC does not exercise the Right by
August 6, 1977, the Right shall expire and be of no further force and effect.
(f) If Executive becomes disabled, no payments shall be
owing by OCC other than those specified in Section 3(c).
6. COVENANTS OF THE EXECUTIVE.
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(a) NONCOMPETITION. From the date hereof through the
Non-compete Termination Date (as defined below), the Executive shall not,
directly or indirectly, engage in or be associated with any entity (other than,
prior to December 31, 1997, King Office Supply Inc.) which engages in a business
which is competitive with the business or activities of OCC and its
subsidiaries, within a 25 mile radius of any business location of OCC or any of
its subsidiaries, whether as a director, officer, employee, agent, consultant,
partner, owner, independent contractor or otherwise. OCC and the Executive
hereby acknowledge that nothing contained herein shall prohibit the Executive
from making investments in other entities or businesses, PROVIDED, that such
entities or businesses are not engaged in activities which are competitive with
the business and activities of OCC and its subsidiaries. The Executive shall
refrain from making any investment in, or receiving compensation or other
payment from, any entity or business which is competitive with the business or
activities of OCC and its subsidiaries. Notwithstanding the foregoing, the
Executive's beneficial ownership of less than 1% of the outstanding capital
stock of a publicly traded company, whether or not such company is competitive
with OCC and its subsidiaries, shall not, in and of itself, be deemed to be
activities which are competitive with the business and activities of OCC and its
subsidiaries.
"Non-compete Termination Date" shall mean:
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(i) If OCC decides, pursuant to Section 5(a), to exercise
its option to cancel this Agreement, the first anniversary of the date on which
the Executive's employment terminates as described in Section 5(a) (assuming no
automatic extension under Section 5(a));
(ii) If the Executive is terminated for Cause or resigns for
any reason, the first anniversary of the effective date of such resignation or
termination for Cause;
(iii) If the Executive's employment is terminated by OCC
pursuant to a Non-Cause Termination, the later of (A) one year from the
effective date of such termination, and (B) the date on which the Executive's
employment would have terminated if the term of this Agreement would have
continued until expiration (assuming no automatic renewals under Section 5(a));
and
(iv) If the Executive becomes Disabled, the date on which no
further payments are owing under Section 3(c).
(b) NONSOLICITATION. From the date hereof through the
Non-compete Termination Date, the Executive shall not, and shall cause each
business or entity with which he shall become associated in any capacity not to,
(i) solicit for employment or employ any person who is then, or who was at any
time six months prior to the date of such termination, employed by OCC or its
subsidiaries or (ii) solicit business from any
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current customer or supplier of OCC or its subsidiaries or any person or entity
who was a customer or supplier of OCC or its subsidiaries at any time within six
months prior to the date of such termination.
(c) CONFIDENTIALITY. The Executive agrees and acknowledges
that the Confidential Information (as defined below) of OCC and its subsidiaries
is valuable, special and unique to its business; that such business depends on
such Confidential Information; and that OCC wishes to protect such Confidential
Information by keeping it confidential for the use and benefit of OCC and its
subsidiaries. Based on the foregoing, the Executive agrees to undertake the
following obligations with respect to such Confidential Information:
(i) the Executive agrees to keep any and all Confidential
Information in trust for the exclusive use and benefit of OCC and its
subsidiaries;
(ii) the Executive agrees that, except as required by
applicable law or as authorized in writing by OCC, he will not, at any time
prior to the second anniversary of the termination of his employment hereunder,
disclose, directly or indirectly, any Confidential Information of OCC or its
subsidiaries;
(iii) the Executive agrees to take all reasonable steps
necessary, or reasonably requested by OCC, to ensure that all Confidential
Information is kept confidential for
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the use and benefit of OCC and its subsidiaries; and
(iv) the Executive agrees that, upon termination of his
employment hereunder or at any other time as OCC may in writing request, he will
promptly deliver to OCC all materials constituting Confidential Information
(including all copies thereof) that are in his possession or under his control.
The Executive further agrees that, if requested by OCC, to return any
Confidential Information pursuant to this subparagraph (iv), he will not make or
retain any copy or extract from such materials.
For purposes of SECTION 6(c), "Confidential Information" means any and all
information developed by or for OCC and its subsidiaries of which the Executive
gains or has acquired knowledge during or prior to the terms of his employment
with OCC by reason of his employment with OCC that is (A) not generally known in
any industry in which OCC and its subsidiaries is or may become engaged or (B)
not publicly available. Confidential Information includes, but is not limited
to, any and all information developed by or for OCC and its subsidiaries
concerning plans, marketing and sales methods, customer lists, materials,
processes, software, procedures, devices, plans for development of products,
services or expansion into new areas of markets, internal operations, and any
trade secrets and proprietary information of any type owned by OCC and its
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subsidiaries, together with all written, graphic, electronic and other materials
relating to all or any part of the same.
(d) REMEDIES. The Executive acknowledges and agrees that the
covenants and obligations of the Executive contained in this SECTION 6 relate to
special, unique and extraordinary matters and are reasonable and necessary to
protect the legitimate interests of OCC and that a breach of any of the terms of
such covenants and obligations will cause OCC irreparable injury for which
adequate remedies at law are not available. Therefore, the Executive agrees that
OCC shall be entitled to an injunction, restraining order, or other equitable
relief from any court of competent jurisdiction, restraining the Executive from
any such breach. OCC's rights and remedies under this SECTION 6(d) are
cumulative and are in addition to any other rights and remedies OCC may have at
law or in equity.
7. EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION. This
agreement shall not be terminated by any:
(a) Merger or consolidation where OCC is not the
consolidated or surviving corporation;
(b) Transfer of all or substantially all of the
assets of OCC unless, in the case of a transfer before an IPO,
the provisions of Section 2(g) hereof are satisfied; or
(c) Voluntary or involuntary dissolution of OCC.
In the event of any such merger or consolidation or transfer of
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assets, the surviving or resulting corporation or the transferee of OCC's assets
shall be bound by and shall have the benefit of the provisions of this
agreement; OCC shall take all actions necessary to insure that such corporation
or transferee is bound by the provisions of this agreement.
8. NON-ASSIGNABILITY. Except as provided in Section 7, above,
neither party shall assign its rights and obligations under this contract
without the written approval of the other party, which approval may be withheld
for any reason or no reason.
9. INDEMNITY. OCC shall indemnify Executive and hold him
harmless for all acts or decisions made by him in good faith that are not
grossly negligent while performing services for OCC. OCC shall also use its best
efforts to obtain coverage for him under any insurance policy now in force or
hereafter obtained during the term of this Agreement covering the other officers
and/or directors against lawsuits. OCC shall pay all expenses including
attorney's fees, incurred by the Executive in connection with the defense of
such act, suit or proceeding and in connection with any related appeal including
the cost of settlement.
10. TIME TO CURE. In the event either party fails to perform
any of either his or its respective obligations hereunder and if such failure
would otherwise constitute a default under this agreement, the non-defaulting
party shall give written
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notice specifying such obligations to the defaulting party who shall have five
(5) business days after receipt of such notice to cure the specified default;
PROVIDED that an action or failure to act that constitutes a default and that
has been described with reasonable particularity may not be cured more than
once.
11. ARBITRATION. Any controversy or claim arising out of, or
relating to this Agreement, or its breach, shall be settled by arbitration in
the City of New York in accordance with the then governing rules of the American
Arbitration Association. Judgment upon the award rendered may be entered and
enforced in any court of competent jurisdiction. The prevailing party shall be
entitled to reasonable attorneys' fees and expenses.
12. NOTICES. Any written notice required or permitted to be
given under any provision of this Agreement shall be deemed to have been given
(a) if to the Executive, when sent by Registered or Certified Mail (return
receipt requested) in a sealed envelope addressed to him at his last known
residence address as shown on OCC's records or when delivered by hand to him or,
in his absence, in a sealed envelope to an adult member of his household, and
(b) if to OCC, when sent by Registered or Certified Mail (return receipt
requested) in a sealed envelope addressed to the OCC or delivered by hand at its
then existing executive offices, ATTENTION: Counsel.
13. ENTIRE AGREEMENT; ENFORCEABILITY; PARTIAL
INVALIDITY.
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(a) This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings between them relating to its subject matter. No
modification or waiver of any of the provisions of this Agreement shall be
effective unless set forth in a writing signed by the party against whom the
same is sought to be enforced. The waiver by either party of any breach of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach hereof by such other party.
(b) The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provisions were omitted.
14. INTERPRETATION OF AGREEMENT. This Agreement is made in the
State of New York and its validity and interpretation shall be governed by the
laws of such state, without giving effect to conflicts of law principles. The
section and subsection headings in this Agreement are for convenience only and
shall be disregarded in any interpretation of this Agreement.
IN WITNESS WHEREOF, OCC has caused this Agreement to be
executed in its name and on its behalf by its Chairman and the Executive has
signed this Agreement as of the day and year first above written.
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OFFICE CENTRE CORPORATION
By:/s/ Xxxxxx Xxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxx
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
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Office Centre Corporation
c/o The King Group
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
May 23, 1997
Xxxxxx X. Xxxxxx, Xx.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxx X. Xxxxxxx
Xxxxx 000
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
Dear Sirs:
By countersignature of this letter agreement, you hereby agree
that if Office Centre Corporation (the "Company") exercises the Right (as
defined in Section 5 of the Employment Agreement dated as of May 1, 1997 between
the Company and Xxxxxx X. Xxxxxx, Xx.), you will sell to the Company any shares
of capital stock of the Company that have been issued to you on or before the
exercise date of the Right. You further agree to take all reasonable actions
requested by the Company to effectuate the foregoing.
Sincerely,
/s/ Xxxxxx Xxxxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Chairman
ACCEPTED AND AGREED
/s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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August 6, 1997
I, Xxxxxx X. Xxxxxx, Xx. ("Executive"), hereby agree that the
reference to August 6, 1997 in Section 5(e) of the Employment Agreement dated
May 1, 1997, between the Executive and Office Centre Corporation, be changed to
August 8, 1997.
/s/ Xxxxxx X. Xxxxxx Xx.
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Xxxxxx X. Xxxxxx, Xx.
