1
EXHIBIT 10.11
Employment Agreement
This Agreement is made and entered into as of the _____ day of October,
1997 by and between Universal Document Management Systems, Inc., an Ohio
corporation (the "Employer"), and Xxxxx X. Xxxxx, (the "Executive").
Whereas, the Employer desires to employ the Executive on the terms and
conditions set forth in this Agreement and the Executive is willing to accept
such employment.
Now, Therefore, In consideration of the mutual covenants and promises
set forth in this Agreement, the Employer and Executive, intending to be legally
bound, agree as follows:
1. Employment. The Employer hereby employs the Executive, and the
Executive hereby accepts employment, upon the terms and conditions set forth in
this Agreement. The relationship between the Executive and Employer is that of
employee and employer.
2. Term. Subject to the provisions for termination set forth in this
Agreement, the term of this Agreement shall be for a period of one (1) year,
beginning on the date of the Initial Public Offering of Employer's common stock.
3. Compensation. For all services rendered by the Executive under this
Agreement, the Employer shall pay Executive during the term of this Agreement:
(i) an annual base salary of One Hundred and Twenty Thousand Dollars ($120,000),
payable in twelve (12) equal installments, and (ii) additional annual incentive
compensation of $120,000 which shall be based on profitability objectives for
the Employer as a whole as may be mutually agreed upon by the parties. All
payments made pursuant to this Section 3 shall be subject to withholding and
other applicable taxes.
4. Fringe Benefits. The Executive shall be entitled to the same fringe
benefits as are offered, from time to time, to other employees of Employer who
are employed in positions similar to that of Executive. These benefits should
include, without limitation, the grant of stock options under Employer's stock
option plan.
5. Duties. The Executive is engaged as President and Chief Executive
Officer, and shall perform such services and assume and discharge such
responsibilities, which are commensurate with his position, as the Employer, in
its reasonable discretion, may, from time to time, require of, or assign to
Executive. The Executive shall not delegate the duties and responsibilities
which are vested in him. He, nevertheless, may utilize and delegate to such
individuals who may also be employed by the Employer those tasks which he deems
necessary or appropriate to help him carry out the duties and responsibilities
assigned to him as an employee of the Employer; except that he shall remain
accountable for such tasks to the Employer. Executive further agrees that he
shall devote substantially his full time, energy and best efforts to the
business of the Employer during the hours that the business remains open and
such additional time as is reasonably necessary to complete Executive's tasks,
except that time Executive is required to devote to his position as Chairman and
a principal of Growth Management Advisors, Inc. Executive agrees to exercise his
best efforts, judgment, skills and talents in performing his duties and, in
general, to comply with the policies and be subject to the direction of the
Board of Directors of the Employer.
6. Direction of Services. The Employer shall direct, control and
supervise the duties and work of Executive; provided, however, that the Employer
shall not impose employment duties or constraints of any kind which would
require Executive to violate any ordinance or law.
7. Exclusive Services. The Executive shall devote his entire business
time, attention, and energies to the business of the Employer, and shall not,
except in or through his capacity as Chairman and a principal of Growth
Management Advisors, Inc. during the term of this Agreement, either directly or
indirectly, engage in any other profession or business whether or
2
not such business activity is pursued for gain, profit, or other pecuniary
advantage to which the Executive would be giving of his time and effort to the
detriment of Employer; but this shall not be construed as preventing the
Executive from serving on boards of directors or trustees of other companies,
corporations or not-for-profit entities, or from investing his assets in such
form or manner as will not require any substantial services on the part of the
Executive in the operation of the affairs of the companies in which such
investments are made; provided, however, that no such investment shall be made
in any company which competes with Employer in any aspect of the computer
business, except that Executive shall be able to invest in any such public
company provided such investment does not exceed 5% of such company's issued and
outstanding shares.
Notwithstanding the above, Employer agrees and acknowledges that
Executive is, and will continue to be, Chairman and a principal of Growth
Management Advisors, Inc.
8. Working Facilities. The Executive shall be furnished, at the expense
of the Employer, with all necessary facilities and equipment for performing his
services hereunder.
9. Disclosure of Information.
A. (i) Executive acknowledges that as a result of his
employment by Employer, he will be making use of, acquiring and/or adding to
confidential information of a special and unique nature and value relating to
Employer's intellectual property, proprietary information, trade secrets,
systems, procedures, manuals, confidential reports and customer lists and all
information related to customer lists and customer sales and service (the
"Confidential Information"). As a material inducement to Employer to enter into
this Agreement and to pay Executive the compensation set forth in this
Agreement, Executive covenants and agrees that, except as authorized by
Employer, he shall not, at any time during or following the term of this
Agreement, directly or indirectly, divulge or disclose for any purpose
whatsoever any Confidential Information. Executive acknowledges that
unauthorized disclosure or misuse of the Confidential Information will cause
irreparable damage to the Employer. Employer and Executive also agree that
covenants by Executive not to make unauthorized disclosures of the Confidential
Information are essential to the growth and stability of the Employer.
Accordingly, Executive agrees to the confidentiality covenants in this Section
of the Agreement.
Confidential information shall not include information
which (i) is or becomes generally available to the public other than as a result
of a disclosure by the Executive or (ii) is or becomes available to the
Executive on a non-confidential basis from a source other than the Employer
provided that such source is not, to the knowledge of the Executive, bound by a
confidentiality agreement with the Employer.
(ii) Because a remedy at law for any breach of the
provisions of this Section may be inadequate, in addition to any and all other
remedies available to Employer, Employer shall have the remedies of a
restraining order, injunction or other equitable relief to enforce the
provisions hereof.
(iii) Executive acknowledges, warrants, represents, and
agrees that the confidentiality covenants contained in this Section are
necessary for the protection of the Employer's legitimate business interests and
are reasonable in scope and content, and Executive represents and warrants that
he has had the opportunity to consult with his attorney concerning this
Agreement and that he understands the contents hereof.
B. Executive agrees to indemnify and hold Employer harmless
from any loss, cost or expense incurred by the Employer arising out of any
material breach of the agreements set forth in this Section or the fact that any
material representation made by Executive in this agreement was false when made.
It is further understood and agreed that in the event there is a material breach
of any of the provisions set forth above, all obligations of Employer shall end,
and Executive's employment with the Employer may be terminated immediately.
2
3
10. Expenses. Executive may, from time to time, incur reasonable
expenses for promoting the business of Employer, including expenses for
entertainment, travel and similar items. In such instances, the Employer will
reimburse the Executive upon submission of an itemized account of such
expenditures.
11. Vacations. The Executive shall be entitled to a vacation of four
(4) weeks per year during the term of this Agreement, during which time his
compensation shall be paid in full.
12. Termination of Employment.
(a) (i) The Employer may terminate this Agreement and
Executive's employment at any time for cause which shall include but not be
limited to (a) Executive's fraud, felony conviction (whether or not employment
related), misappropriation, embezzlement or the like, or (b) if, for any reason,
Executive fails or neglects to perform his duties hereunder in any material
respect, or if Executive violates any of the provisions hereunder in any
material respect and such failure, neglect or violation is not cured by the
Executive to the Employer's reasonable satisfaction within a period of thirty
(30) days following the Executive's receipt of written notice from the Employer
making specific reference to this Section 12(a)(i)(b) and stating with
particularity all alleged actions or omissions in the Executive's service being
relied upon by the Employer hereunder.
(ii) Executive may terminate this agreement and his
employment if (a) the Employer requires Executive to relocate more than 40 miles
from the current location of Executive's branch of Employer or (b) there is a
material and adverse change in Executive's position, duties, responsibilities or
status with the Employer; a material reduction in Executive's salary or
benefits, other than a reduction in salary or benefits comparable to reductions
generally applicable to similarly situated employees of the Employer; or the
Employer violates any of the provisions of this Agreement in any material
respect and such change, reduction or violation is not cured to the Executive's
reasonable satisfaction within a period of thirty (30) days following the
Employer's receipt of written notice from the Executive making specific
reference to this Section 12(a)(ii)(b) and stating with particularity all
alleged actions or omissions of the Employer being relied upon by the Executive
hereunder.
(b) The Employer or Executive may terminate this Agreement
without cause upon thirty (30) days written notice to the other party.
(c) This Agreement shall also be terminated (i) by the mutual
agreement of Employer and Executive; (ii) by the dissolution and liquidation of
Employer (other than as part of a reorganization, merger, consolidation, or sale
of all or substantially all of the assets of Employer through which the business
of the Employer is continued); and (iii) by the total or complete disability of
the Executive for more than 90 consecutive days.
(d) If this Agreement is terminated by Employer pursuant to
Section 12(a)(i), by Executive pursuant to Section 12(b) or pursuant to Section
12(c)(i), Executive shall be paid only such amounts as are accrued under
Sections 3, 4 and 10, but are unpaid as of the date of termination. Payment
pursuant to this Section 12(d) shall be made to Executive as soon as
practicable, and shall be subject to withholding and other applicable taxes.
(e) If this Agreement is terminated by Executive pursuant to
Section 12(a)(ii), by Employer pursuant to Section 12(b), or pursuant to Section
12(c)(ii), or Section 12(c)(iii), Executive shall receive severance pay in the
amount of one year's salary. Payments pursuant to this Section 12(e) shall
continue to be made by Employer in equal monthly installments, and shall be
subject to withholding and other applicable taxes.
(f) In the event of termination of this Agreement for any
reason, Executive agrees to resign from all positions held in Employer or any of
its affiliate or subsidiary companies, including without limitation any position
as a director, officer, trustee or consultant.
13. Restrictive Covenants.
3
4
(a) The provisions of the Section apply in the event this
Agreement is terminated for any reason whatsoever.
(b) For a period of one (1) year after termination or
expiration of this Agreement, the Executive shall not, except in or through his
capacity as Chairman and a principal of Growth Management Advisors, Inc.
directly or indirectly, (i) own, manage, operate, control, direct, be employed
by, participate in, or be connected in any manner with the ownership,
management, operation, direction or control of any business which competes with
the business conducted by the Employer at the time of the termination of this
Agreement; (ii) solicit any of Employer's customers; or (iii) solicit for
employment any of Employer's employees.
(c) Executive acknowledges that the foregoing time and other
limitations are reasonable and properly required for the adequate protection of
the business affairs of the Employer, and in the event any such limitation is
found to be unreasonable by a Court of competent jurisdiction, Executive agrees
and submits to the reduction of said limitation to such an area, time or other
limitation or otherwise as the Court may determine to be reasonable. In the
event that any limitation under this Section is found to be unreasonable or
otherwise invalid in any jurisdiction, in whole or in part, Executive
acknowledges, warrants, represents, and agrees that such limitation shall
nevertheless be valid in all other jurisdictions.
(d) Executive acknowledges, warrants, represents, and agrees
that the restrictive covenants contained in this Section are reasonable and
necessary for the protection of the Employer's legitimate business interests and
are reasonable in scope and content and represents and warrants that Executive's
attorney has reviewed this Agreement with Executive and Executive understands
the contents of these restrictive covenants.
(e) Because a remedy at law for any breach of the provisions
of this Section will be inadequate, in addition to any and all other remedies
available to the Employer, the Employer shall have the remedies of a restraining
order, injunction or other equitable relief to enforce the provisions hereof.
14. Death During Employment. If the Executive dies during the term of
his employment hereunder, the Employer shall pay to the estate of the Executive
the compensation, if any, accrued but unpaid to the date of death.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by certified or
registered mail or personally delivered to his residence in the case of the
Executive or to its principal place of business in the case of the Employer.
Either party, by notice to the other, may change the address to which further
notice is to be sent to such party.
16. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach.
17. Assignment. The rights and obligations of the Employer and
Executive under this Agreement are of a personal nature and, therefore, this
Agreement and the rights and obligations of the parties are not assignable by
either party, without the prior written consent of the other party.
18. Entire Agreement; Amendments. This Agreement contains the entire
agreement of the parties. This Agreement may be amended at any time by mutual
consent of the parties provided, however, that no such amendment shall be valid
or enforceable unless set forth in writing and signed by Employer and Executive.
19. Applicable Laws. This Agreement shall be interpreted and enforced
in accordance with the laws of the State of Ohio.
20. Severability. The invalidity or unenforceability of any provision
in the Agreement shall not in any way affect the validity of enforceability of
any other provision and
4
5
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision had never been in the Agreement.
21. Headings. The various headings in this Agreement are inserted for
convenience only and are not part of the Agreement.
22. Expenses. All expenses, including reasonable attorney's fees and
expenses, arising out of claims under this Agreement, shall be borne by the
losing party to the fullest extent permitted by law.
IN WITNESS WHEREOF, Employer and Executive have executed this Agreement
as of the ______ day of October, 1997.
Universal Document Management Systems, Inc.
By: _______________________________________
Its: ______________________________________
Executive:
___________________________________________
Xxxxx X. Xxxxx
5
