EXHIBIT 10(h)(i)
EXECUTIVE SERVICES AGREEMENT
THIS EXECUTIVE SERVICES AGREEMENT (the "Agreement"), made
effective January 5, 1998, by and between QMS, Inc., a Delaware
corporation, and Xxxxxx X. Xxxxxxx ("Xxxxxxx" ), an individual
presently residing at Sanibel Island, Florida. QMS and Xxxxxxx
are collectively referred to in this Agreement as the "Parties".
In consideration of the mutual covenants and promises of the
parties to this Agreement, the sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1. Employment. QMS employs Xxxxxxx as president and chief
executive officer to serve at the pleasure of the QMS Board of
Directors (the "Board"), and Xxxxxxx accepts such employment,
subject to the terms and conditions of this Agreement. Xxxxxxx
will serve QMS faithfully and to the best of his ability under
the direction of the Board, and Xxxxxxx will devote all of his
time, energy, and skill during regular business hours to such
employment.
2. Term of Employment. This Agreement and the employment
under this Agreement shall commence on the effective date stated
above, and continue until terminated by the Board or Xxxxxxx'x
resignation from QMS.
3. Directorships.
(a) Xxxxxxx hereby consents to serve as director of QMS as
of the effective date of this Agreement, serving as a Class II
director pursuant to his appointment by the Board in accordance
with the By-Laws of QMS. The Parties acknowledge it is the
expressed intent of the Board to elect Xxxxxxx to serve as the
chairman of the Board as of October 3, 1998.
(b) Xxxxxxx shall resign from the Board of Directors of
Genicom Corporation prior to January 5, 1998.
4. Compensation.
(a) Xxxxxxx'x initial base salary shall be at a rate of
$350,000 per year and will be reviewed at least annually by the
Compensation Committee of the Board. QMS shall pay Xxxxxxx'x
base salary on a pro rata basis every two weeks pursuant to QMS'
normal payroll practices.
(b) Xxxxxxx shall be eligible for incentive bonus
compensation in the amount of $350,000 annualized for QMS' Fiscal
1998, payable as follows:
(i) $29,167 per month for the months of
January through June, 1998. This
monthly amount is guaranteed by QMS
regardless of QMS' performance
during that period.
(ii) $87,501 contingent upon QMS
realizing a pre-tax profit
(calculated after incentive
compensation payments to Xxxxxxx
are accounted for) of $3,800,000
("Profit Target") for QMS Fiscal
1998. This payment, if earned,
shall be made to Xxxxxxx by October
30, 1998.
(iii) $20,000 for each $100,000 of
pre-tax profit (calculated after
incentive compensation payments to
Xxxxxxx are accounted for) earned
by QMS above the Profit Target, up
to maximum of $200,000.
(c) Xxxxxxx shall be granted options for the purchase of QMS
common stock as follows:
(i) 300,000 total shares, as of January
5, 1998, at an exercise price
representing the closing price of
QMS' stock on January 5, 1998 for
100,000 shares ("ISO") and at the
closing price of QMS' common stock
on December 12, 1997 for 200,000
shares of non-qualified. 100,000
shares shall be "Incentive Stock
Options" ("ISO") as that term is
defined in the Internal Revenue
Code, and the balance shall be non-
qualified options. The grant of
100,000 shares of such non-
qualified options shall be
contingent upon the approval on
January 20, 1998 by the QMS
Shareholders of management's
request for additional shares for
the 1997 Stock Incentive Plan (the
"Plan"). Vesting shall be 33,333.3
shares per year for three years for
the ISO grant, and 66,666.6 shares
per year for the non-qualified
grant.
(ii) Contingent upon the approval on
January 20, 1998 by the QMS
shareholders of management's
request for additional shares for
the 1997 Stock Incentive Plan,
100,000 shares (non-qualified) as
of January 5, 1998 at an exercise
price equal to the closing price of
QMS' common stock on December 12,
1997, exercisable when and if the
value of QMS' common stock averages
$7.00 per share for two consecutive
weeks. Vesting for such shares
shall be immediate.
(iii) Contingent upon the approval
on January 20, 1998 by the QMS
shareholders of management's
request for additional shares for
the 1997 Stock Incentive Plan,
100,000 shares (non-qualified) as
of January 5, 1998 at an exercise
price equal to the closing price of
QMS' common stock on December 12,
1997, exercisable when and if the
value of QMS' common stock averages
$12.00 per share for two
consecutive weeks. Vesting for such
shares shall be immediate.
(d) Xxxxxxx shall be paid a monthly automobile allowance in
the amount of $750, payable on the first day of each month
(except for the initial payment which shall be made by January 9,
1998.
(e) Xxxxxxx shall be reimbursed for any initiation fees,
bonds and membership dues incurred by him for his membership in a
social club in the Mobile, Alabama area.
5. Relocation Bonus. Xxxxxxx shall be paid a $150,000 gross
payment in lump sum upon his request following his permanent
relocation to the Mobile, Alabama area for the purpose of
performing his obligations under this Agreement. This payment is
in lieu of all other obligations of QMS regarding Xxxxxxx'x
expenses incurred in his relocation except for QMS's obligation
to reimburse Xxxxxxx for the reasonable costs of packing,
transporting, storage and unpacking his household effects from
Nashville, Tennessee to the Mobile, Alabama area.
6. Termination.
(a) Except as provided in Section 6(b) of this Agreement,
this Agreement may be immediately terminated on written notice to
Xxxxxxx by the QMS Secretary on behalf of the Board if Xxxxxxx
fails to perform or to comply with any material term or condition
of this Agreement.
(b) If Xxxxxxx shall fail or be unable to perform the
services required under this Agreement because of any physical or
mental infirmity, and such failure or inability shall continue
for three (3) consecutive months, or for six (6) months during
any consecutive twelve-month period, QMS shall have the right to
terminate this Agreement 90 days after delivering written notice
of such termination to Xxxxxxx; provided, however, that Xxxxxxx
shall continue to receive his full compensation under this
Agreement to the date of termination, in spite of any such
infirmity. The non-competition provisions of Sections 7 and 8
shall continue in effect in spite of such termination of this
Agreement, but if, after recovery from such infirmity as
evidenced by a medical certificate of a physician retained by
QMS, QMS does not choose to retain Xxxxxxx in some executive
capacity, the noncompetition provisions of Sections 7 and 8, if
still in effect, shall cease to be operative.
7. Non-Competition. Xxxxxxx agrees that, in addition to any
other limitation, for a period of two (2) years after the
termination of his employment under this Agreement, except for a
termination caused by QMS in violation of the terms of this
Agreement, Xxxxxxx will not directly or indirectly engage in, or
in any manner be connected with or employed by any person, firm,
corporation, or other entity in competition with QMS or engaged
in the development, manufacture or sale of document imaging
solutions or related technologies in the United States.
8. Solicitation After Termination. Xxxxxxx agrees that, in
addition to any other limitation, for a period of two (2) years
after the termination of this Agreement, except for a termination
caused by QMS in violation of this Agreement, Xxxxxxx will not,
on behalf of himself or any other person, firm, corporation, or
other entity, solicit, recruit, or divert any employee of QMS, or
any candidate for employment by QMS, for employment elsewhere.
9. Use of Confidential Information. Xxxxxxx agrees that, in
addition to any other limitation contained in this Agreement,
regardless of the circumstances of the termination of employment,
he will not communicate to any person, firm, corporation, or
other entity any information relating to customers lists,
unpublished costs and prices, designs, and proprietary
technology, or any other confidential knowledge or secrets that
Xxxxxxx might from time to time acquire with respect to the
business of QMS, or any of its subsidiaries.
10. Injunctive Relief. Xxxxxxx hereby acknowledges that the
services to be rendered under this Agreement are of a unique,
special, and extraordinary character that would be difficult or
impossible for QMS to replace, and by reason of such difficulty,
employee hereby agrees that for a violation of any of the
provisions of this Agreement, QMS shall, in addition to any other
rights and remedies available under this Agreement, at law or
otherwise, be entitled to an injunction to be issued by any court
of competent jurisdiction enjoining and restraining Xxxxxxx from
committing any violation of this Agreement, and Xxxxxxx hereby
consents to the issuance of such injunction.
11. Termination by Xxxxxxx. If QMS shall cease conducting its
business, take any action looking toward its dissolution or
liquidation, admit in writing its inability to pay its debts as
they become due, file a voluntary or be the subject of an
involuntary petition in bankruptcy, or be the subject of any
state or federal insolvency proceeding of any kind, then Xxxxxxx
may, in his sole discretion, by written notice to QMS, terminate
his employment and QMS hereby consents to the release of Xxxxxxx
under such circumstances and agrees if QMS ceases to operate or
to exist as a result of such event, the provisions of Sections 7
and 8 shall terminate.
12. Binding Effect. This Agreement shall be binding on and
shall inure to the benefit of any successor or successors of QMS
and the personal representatives of Xxxxxxx.
13. Governing Law. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State
of Alabama.
14. Entire Agreement. This Agreement shall constitute the entire
agreement between the Parties and any prior understanding or
representation of any kind preceding the effective date of this
Agreement shall not be binding upon either party except to the
extent incorporated in this Agreement.
15. Modification of Agreement. Any modification of this
Agreement or additional obligation assumed by either party in
connection with this Agreement shall be binding only if evidenced
in writing by each party or an authorized representative of each
party.
16. No Waiver. The failure of either party to this Agreement to
insist upon the performance of any of the terms and conditions of
this Agreement, or the waiver of any breach of any of the terms
of this Agreement, shall not be construed as thereafter waiving
any such terms and conditions, but the same shall be continue and
remain in full force and effect as if no such forbearance or
waiver had occurred.
17. Attorney Fees. In the event any action is filed in relation
to this Agreement, the unsuccessful party in the action shall pay
to the successful party, in addition to all sums that either
party may be called on to pay, a reasonable sum for the
successful party's attorney's fees.
18. Notices. Any notice provided for or concerning this
Agreement shall be in writing and shall be deemed sufficiently
given when given in person, by telecopy or when sent by certified
or registered mail, postage prepaid, if sent to the respective
address of each party as set forth below:
If to QMS: With a simultaneous copy to:
Secretary Xxxxxxx X. Xxxxx, Esq.
QMS, Inc. Hand Xxxxxxxx, L.L.C.
Xxx Xxxxxx Xxxx Xxxxx 0000
Xxxxxx,Xxxxxxx 00000 First National Bank Xxxxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxx, Xxxxxxx 00000
If to Xxxxxxx: Xx. Xxxxxx X. Xxxxxxx
at QMS,Inc.
Xxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
(Or such other address as Xxxxxxx may
designate in writing to the addressees
set forth above)
IN WITNESS WHEREOF, the Parties have executed and delivered
this Executive Services Agreement as of the day and year
indicated above.
QMS, Inc. Xxxxxx X. Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Executive Vice President and
Chief Operating Officer
ATTEST: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Secretary
QMS, Inc.
