BT OFFICE PRODUCTS INTERNATIONAL, INC.
Riverwalk, Suite 590
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
August 11, 1997
Xx. Xxxxxxx X. Xxxxx
000 Xxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Dear Xxxxxxx:
This letter will confirm our mutual agreement regarding the terms and
conditions of your appointment to act as the Executive Vice President of BT
OFFICE PRODUCTS INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
President, BT Office Products North America, of the Company. This letter
constitutes an agreement between you and the Company.
1. The term of your appointment (the "Term") with the Company shall
commence as of the date hereof and shall continue until December 31, 1999,
unless renewed or sooner terminated pursuant to the provisions set forth below.
During the Term, you will act as Executive Vice President of the Company and
President, BT Office Products North America, of the Company, reporting to the
Chief Executive Officer of the Company. In such capacity, you agree to perform
such services and duties as the Chief Executive Officer or the Board of
Directors of the Company may direct, consistent with your position as a senior
executive officer; notwithstanding the foregoing, in performing such services
and duties, you will not be required, without your consent, to relocate your
residence from the location which you now reside. You agree to serve the Company
in such capacity faithfully and to the best of your ability, on a full time
basis, and to diligently and competently perform your services and duties during
your appointment hereunder.
2. During the Term, you will be entitled to receive the following compensation
and benefits:
(a) Your base salary will be at the rate of $325,000 per
annum, which shall be subject to applicable withholding taxes and authorized
deductions and payable in accordance with the payroll policies of the Company in
effect from time to time.
(b) For each year of the Term, you shall be eligible to
receive an annual bonus of up to sixty percent (60%) of your annual base salary
based on achievement of certain financial criteria and targets as determined
annually by the Company's Board of Directors. You will be entitled to earn an
annual bonus for the 1997 calendar year calculated on a pro rata basis in
accordance with the bonus plan in effect during the period of time you were
President, Midwest Region and President, BT Office Products North America,
respectively, provided, that such annual bonus shall not be less than the amount
you would have earned under your 1997 bonus plan for the Midwest Region.
Attachment A hereto sets forth the bonus criteria and targets relating to your
1997 bonus under this letter agreement.
(c) You will be entitled to receive such medial, paid
vacation, hospitalization and life insurance benefits as are provided generally
to employees of the Company in accordance with the personnel policies of the
Company in effect from time to time.
(d) You will be reimbursed for all reasonable and customary
business related expenses incurred by you in performing your duties hereunder,
upon receipt of reasonably itemized vouchers and documentation as required by
the Internal Revenue Code and Company policy.
(e) You will be entitled to an aggregate annual perk
allowance of $25,000 (taxable), which may be applied to, among other things, the
lease of a Company automobile(s), including the expenses of maintenance, fuel
and insurance, and annual membership fees and dues for country clubs and civic
organizations. Your annual perk allowance for the 1997 calendar year shall be an
amount equal to $19,167, less the amount previously charged to your perk
allowance during the period January 1 to August 11, 1997.
(f) So long as you do not move your permanent residence to
the greater Chicago area, you will receive a taxable housing allowance equal to
$50,000 per annum (prorated for the 1997 calendar year), payable in equal
installments at the same time base salary payments are made hereunder. In
addition, you will be entitled to a one-time, taxable settling-in allowance in
an amount equal to $25,000.
(g) In connection with your appointment hereunder, the
Company hereby grants to you an option to purchase a total of 75,000 shares of
the Company's common stock at an exercise price of $9 1/16 per share, pursuant
to the Company's 1995 Stock Option Plan and Stock Option Agreement, copies of
which are attached hereto as Attachment B.
(h) In addition to participating in a Company 401 (K) plan,
you shall be entitled to participate in a Supplemental Executive Retirement Plan
("SERP") for selected Company employees. For each completed year of the Term
during which you are an employee of the Company (except as set forth in
Paragraph 3 (a) (iv) below), the Company will credit your account under the SERP
in an amount equal to 11% of your base salary (the "SERP Payment"). The Company
will credit your account with such SERP Payment on a pro rata basis for the 1997
calendar year and for any partial year of the Term during which you are an
employee of the Company, except in the event that your appointment hereunder is
terminated by your written resignation from the Company pursuant to Paragraph 3
(b) (iii) (except a resignation following non-renewal as provided in Paragraph 3
(a) below), or by the Company for cause pursuant to Paragraph 3 (b) (iv).
3. (a) At the option of the Company, your appointment hereunder may be
renewed by the Company on the same terms set forth in this letter, subject to a
review of your base salary and renewal period, by giving you written notice of
renewal not later than December 31, 1998. At the time of such notice, your base
salary and renewal period shall be reviewed by the Company, and if the base
salary and renewal period proposed for the renewal of your appointment shall be
acceptable to you, your appointment hereunder shall be renewed and an
appropriate supplement to this letter shall be prepared and signed by you and
the Company to reflect such renewal. In the event that the Company shall not
give you such a notice of renewal on or before December 31, 1998 or if the new
proposed base salary (or the proposed renewal period) is not acceptable to you,
your appointment hereunder shall not be renewed and you shall be entitled to
terminate your appointment hereunder at any time during the remainder of the
last year of the initial Term upon thirty (30) days prior written notice to the
Company. In the event that you shall so terminate your appointment hereunder at
any time, you shall be entitled to receive the following as severance, which
shall be in lieu of any and all other severance plans and arrangements with the
Company; (i) continuation during the remainder of the eighteen (18) month period
following December 31, 1998 of your base salary, medical, hospitalization and
life insurance benefits (provided, however, your medical, hospitalization and
life insurance benefits shall be discontinued at such time as a new employer
shall provide you with substantially comparable benefits); (ii) payment of the
balance of your perk allowance during the remainder of the eighteen (18) month
period following December 31, 1998, payable in equal installments at the same
time base salary payments are made hereunder; (iii) payment of a bonus for the
last year of the initial Term equal to 1.5 times the average of your bonuses, if
any, earned for the last two years of service to the Company, such bonus to be
paid at the time your annual bonus hereunder would have been paid had you not
terminated your appointment hereunder; and (iv) payment of the balance of your
retirement plan contributions (i.e., 401 (K) and SERP) for the remainder of the
eighteen (18) month period following December 31, 1998, such payments to be made
at the same time, and to the same extent, as they would have been made had you
not terminated your appointment hereunder. The foregoing payments shall continue
notwithstanding your death or disability subsequent to such termination of
appointment. Furthermore, in the event that you shall so terminate your
appointment hereunder, you shall have no obligation to report for work with the
Company for the remainder of the Term or to seek employment elsewhere.
(b) In addition, your appointment hereunder shall terminate prior
to the end of the Term on the first to occur of: (i) your death; (ii) your
physical or mental disability (a "Disability") which Disability, based upon
medical or psychiatric advice from a doctor or doctors selected by the Company
and reasonably acceptable to you, prevents you from doing all material and
substantial duties of your position for a period of six (6) consecutive months
or for an aggregate of nine (9) months in any twelve (12) month period; (iii)
your written resignation from the Company on thirty (30) days prior written
notice; (iv) your discharge by the Company for cause; or (v) your termination by
the Company without cause upon written notice by the Company. For purposes of
this Paragraph, the term "cause" shall mean (A) a continuation of a default or
breach by you of your material obligations as outlined herein after receipt of a
written notice specifying such default or breach and expiration of thirty (30)
days without a cure of such default or breach, or (B) your misconduct,
dishonesty, insubordination or other act (excluding errors in judgment made in
good faith) which materially and adversely affects the Company's relationships
with its customers, suppliers or employees, as outlined in a written notice from
the Company specifying such misconduct, dishonest, insubordination or other act
and not cured within ten (10) days of receipt of such notice (it being
understood that no such ten (10) day grace period shall apply where the conduct
in question cannot, in the reasonable judgment of the Company, be cured by you).
In the event of your Disability, the base salary payable to you hereunder during
such period of Disability shall be reduced by the amounts you are eligible to
receive as disability benefits pursuant to the Company's long term disability
plan then in effect.
(c) In the event that your appointment hereunder is terminated by
your death, a Disability, your written resignation from the Company pursuant to
Paragraph 3 (b) (iii) (except a resignation following non-renewal as provided in
Paragraph 3 (a) above), or by the Company for cause pursuant to Paragraph 3 (b)
(iv), you shall be entitled to receive your earned and unpaid base salary
through the effective date of such termination and business expense
reimbursements in accordance with Paragraph 2 (d) hereof through the effective
date of such termination, and any other amounts due to you under this letter
agreement for the Term year immediately preceding the year in which such
termination occurred, which amounts are unpaid by the Company as of the date of
termination. In addition, in the event that your appointment hereunder is
terminated by your death or a Disability, you shall be entitled to receive any
unpaid perk allowance due pursuant to Paragraph 2 (e) hereof through the
effective date of termination and a bonus payment for the year during which such
termination occurs equal to the average of your bonuses, if any, earned for the
last two (2) years of service to the Company prior to such termination, prorated
to account for such partial year, such prorated bonus to be paid at the time
your annual bonus hereunder for such year would have been paid had the
termination of your appointment hereunder not occurred. Any options which have
been granted to you shall continue to be governed by the provisions of the Stock
Option Plan.
(d) In the event that the Company shall terminate your
appointment hereunder without cause pursuant to Paragraph 3 (b) (v) above, you
shall be entitled to receive the following as severance, which shall be in lieu
of any and all other severance plans and arrangements with the Company: (i)
continuation for a period of eighteen (18) months of your base salary, medical,
hospitalization and life insurance benefits (provided, however, your medical,
hospitalization and life insurance benefits shall be discontinued at such time
as a new employer shall provide you with substantially comparable benefits);
(ii) payment of your perk allowance for a period of eighteen (18) months,
payable in equal installments at the same time base salary payments are made
hereunder; (iii) payment of a bonus for each year remaining on the initial Term
equal to 1.5 times the average of your bonuses, if any, earned for the last two
(2) years of service to the Company prior to such termination, such bonus to be
paid at the time your annual bonus would have been paid had your appointment
hereunder not been terminated; and (iv) payment of the balance of your
retirement plan contributions (i.e., 401 (K) and SERP) for the remaining 18
month period following termination of employment, such payments to be made at
the same time, and to the same extent, as they would have been made had your
appointment hereunder not been terminated.
(e) Any amounts payable under Paragraphs 3 (a) or 3 (d) above
shall be subject to applicable withholding taxes and authorized deductions and
shall be payable in accordance with the payroll policies of the Company in
effect from time to time.
(f) If your employment with the Company is terminated for any
reason whatsoever, any and all sums advanced by the Company to you shall be
promptly repaid to the Company.
(g) Except as specifically provided in Paragraphs 3 (a) and 3 (d)
above, you shall not be entitled to severance in the event of termination of
your appointment hereunder for any reason.
4. (a) You recognize and acknowledge that the Company's marketing
methods, forms, customer lists, price schedules, pricing systems, product lists,
catalogues and similar proprietary information, as the same may exist from time
to time, to the extent that these marketing methods, forms, customer lists,
price schedules, pricing systems product lists, catalogues and similar
proprietary information are not publicly available, are valuable and unique
assets of the Company. You agree that you will not, at any time during or after
the Term, directly or indirectly, use any of the foregoing for your own purposes
or disclose any of the foregoing information or any part thereof (except in the
performance of your duties under this letter) to any person or entity for any
reason or purpose whatsoever. In the event of a breach, or threatened breach, by
you for the provisions of this Paragraph 4, the Company shall, in addition to
all other available remedies, be entitled to an injunction restraining you from
disclosing, in whole or in part, any of the foregoing information or from
rendering any services to any person or entity to whom the foregoing
information, in whole or in part, has been disclosed and/or threatened to be
disclosed.
(b) You hereby agree that any and all improvements, inventions,
discoveries, formulae, processes, methods, know-how, confidential data, trade
secrets and other proprietary information (collectively, "Work Product") within
the scope of the Business (as defined below) of the Company or any affiliate of
the Company which you may conceive or make or have conceived or made during your
appointment with the Company shall be and are the sole and exclusive property of
the Company, and that you shall, whenever requested to do so by the Company, at
its expense, execute and sign any and all applications, assignments or other
instruments and do all other things which the Company may deem necessary or
appropriate (i) in order to apply for, obtain, maintain, enforce or defend
letters patent, trademarks or copyrights in the United States or any foreign
country for any Work Product, or (ii) in order to assign, transfer, convey or
otherwise make available to the Company the sole and exclusive right, title and
interest in and to any Work Product.
5. (a) You acknowledge that, during the Term, you will gain valuable
and proprietary information regarding the Company and its respective operations
and customers. Accordingly, in consideration of the covenants and agreements of
the Company under this letter you convenant and agree that (i) during the Term,
you will not directly, or indirectly through any other person or entity, own,
operate, manage, join, control, participate in the ownership, management,
operation or control, of, or be paid or employed by or act as consultant, agent
or distributor for, any business entity or activity which is engaged in the
office products (including, without limitation, office furniture, office
equipment, office supplies, printing and advertising specialties) business of
the Company (the "Business"), and (ii) for a period of eighteen (18) months
after the termination of your employment with the Company for any reason, you
will not:
(A) directly, or indirectly through any other person or entity,
own, operate, manage, join, control, participate in the ownership,
management, operation or control of, or be paid or employed by or act as
consultant, agent or distributor for, any business entity or activity
which, in the reasonable judgment of the Company, is competitive with the
Business;
(B) directly, or indirectly through any other person or entity,
solicit any sales to or other business of any person or entity which,
during the Term, was a customer or an active prospect of the Company or
its affiliates in connection with the Business; or
(C) hire, or attempt to hire for employment or as an independent
sales representative, in any business enterprise or activity, any person
which is, or during the immediately preceding six (6) month period was,
an employee or independent sales representative of the Company or any of
its affiliates in connection with the Business.
The Company hereby acknowledges that you may have an ownership interest of up to
3% of the outstanding stock of one or more publicly traded companies.
(b) You acknowledge that the foregoing noncompetition covenant is a
fair and reasonable restriction, that such covenant is reasonably required for
the protection of the Company and that the consideration therefore is a fair and
adequate consideration, and that such covenant shall survive the termination of
this letter.
(c) You acknowledge that any breach or threatened or attempted breach
of any provision of this Paragraph 5 would cause irreparable harm to the Company
not compensable in money damages and that the Company and each of its affiliates
shall be entitled, in addition to all other-applicable remedies, to a temporary
and permanent injunction and a decree for specific performance of the terms of
this Paragraph 5 without being required to prove damages or furnish any bond or
other security.
(d) In the event that any provision of this Paragraph 5 is determined
to be invalid by any court or other entity of competent jurisdiction, the
provisions of this Paragraph 5 shall be deemed to have been amended, and the
parties hereto agree to execute all documents necessary to evidence such
amendment, so as to eliminate or modify any such invalid provision so as to
carry out the intent of this Paragraph 5 as far as possible and to render the
terms of this Paragraph 5 enforceable in all respects as so modified.
6. This letter and the obligations of the parties hereunder shall be
construed, governed and enforced in accordance with the laws of the State of
Missouri without giving effect to its rules regarding conflicts of law, and the
parties hereto expressly waive trial by jury in any judicial proceeding
involving, directly or indirectly, any matter in any way arising out of this
letter or out of the employment relationship between us.
7. This letter constitutes all of the understandings and agreements
existing between the parties hereto concerning the specific subject matter of
this letter and the rights and obligations created under it as of this date and
supersedes and replaces any and all other agreements, plans or arrangements
regarding the subject matter hereof.
8. This letter may not be amended, altered, modified, or otherwise
changed in any respect except by the written agreement of the parties. Any
waiver by any party of any breach of any provision of this letter shall not be a
waiver of any subsequent breach thereof or of any breach of any other provision
hereof.
9. The provisions of Paragraphs 3 (a), 3 (b), 3 (c), 3 (f), 4, 5 and 6
shall survive the expiration or termination of your employment with the Company
for any reason.
10. Any notice or other communication required or permitted under this
letter shall be effective only if it is in writing and delivered personally or
sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Company:
Vice President - Human Resources
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
If to Xx. Xxxxxxx X. Xxxxx:
000 Xxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
or to such other address as either party may designate by notice to the other,
and shall be deemed to have been given upon receipt.
This letter may be executed in several counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.
Kindly sign this letter where indicated to reflect your agreement to its terms.
BT OFFICE PRODUCTS INTERNATIONAL, INC.
By: /s/ Xxxxx X.X. Koffrie
--------------------------------------
Xxxxx X.X. Koffrie
Chief Executive Officer and President
ACKNOWLEDGED AND AGREED:
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Attachments: 1997 Bonus Criteria and Targets
Stock Option Plan and Agreement
