Services Agreement
To Xxxxxxxx X. Xxxxxxx:
This Agreement establishes the terms of your continuing employment with
U.S. Office Products Company, a Delaware corporation (the "Company"). You and
the Company agree that your changing role with the Company and expected role
with the entities proposed (as of January 13, 1998) to be distributed to the
Company's shareholders in spinoffs (the "Spincos") warrant a replacement of your
amended and restated employment agreement with the Company dated as of November
4, 1997 (the "1997 Agreement"). This Agreement is contingent on and subject to
the closing of the distributions (the "Distributions") of the Spincos (or such
subset of the Spincos as the Company completes in accordance with the plan
approved by the Company's Board of Directors (the "Board") on January 12, 1998).
If the Distributions do not close by September 30, 1998, this Agreement will
have no force or effect and your 1997 Agreement will remain in place and in
effect.
Duties You agree to serve as consultant to the Company to
provide mutually agreed services. You are resigning
from the Board effective as of and contingent on the
Distributions.
Term The term of this Agreement runs from the closing date
of the Distributions (the "Closing Date") through June
30, 2001, unless earlier terminated as provided in this
Agreement for breach of the No Competition provision.
Salary You will receive an annual salary of $48,000 from the
Closing Date.
Company Your Company options will continue to vest and be
Options exercisable on their current schedules while the
Company employs you. All unvested options will vest
and be exercisable at your death.
The Company will adjust the exercise price of your
options consistent with adjustments for substantially
all of the other optionholders' options.
Your existing Company options will not convert into
Spinco options.
The Company will accelerate your options if and to the
extent that the Company accelerates the exercisability
of options for substantially all management
optionholders.
You waive any claim to participate in any matching or
reload program that may apply to other employees of the
Company.
The unexercised portions of your Company options will
expire if you violate the No Competition provision as
it applies to the Company.
Moving You agree to relocate out of your current office space,
and the Company will reimburse your moving expenses
(not to exceed $5,000).
Spinco Compensation You will receive options in the Spincos in
consideration for noncompetition protection and certain
mutually agreed advisory services as an employee of
each Spinco. You will not receive any other
compensation unless separately agreed.
Option Your Spinco options will cover 7.5% of the outstanding
common stock of each Spinco determined as of the
Distribution Date, with no anti-dilution provisions in
the event of issuance of additional shares of common
stock (other than with respect to stock splits or
reverse stock splits).
Term Each Spinco option will expire ten years from Closing
Date.
Price Each Spinco option will have a per share exercise price
equal to the fair market value of each Spinco company's
stock, determined based on the initial trading price on
the day each Spinco stock is first publicly traded (the
"First Trade Date").
Schedule Each Spinco option will be fully exercisable and vested
as to 5% of the stock when granted, with the 5%
determined as of the Distribution Date and with no
anti-dilution provisions in the event of issuance of
additional shares of common stock (other than with
respect to stock splits or reverse stock splits). It
will vest and be exercisable as to the remaining
portions of the option as follows:
(i) as of the 18-month anniversary of the First
Trade Date if the average closing trading price
over the 15 business days preceding that
anniversary date exceeds the initial trading price
(with the price adjusted for stock splits or
reverse stock splits or other corporate events
that cause Spinco to adjust substantially all
outstanding options) by at least 25% or
(ii) as of the sixth anniversary of the First
Trade Date if the first clause condition is not
met and if you are still employed by the Spinco.
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Your Spinco options with respect to a particular Spinco
will accelerate if and to the extent the relevant
Spinco accelerates the options for substantially all
management optionholders.
All unexercised portions of Spinco options with respect
to a particular Spinco will expire if you violate the
No Competition provision as it applies to the
respective Spinco.
All unexpired options will vest and be exercisable at
your death.
Termination The Company can terminate your employment under this
Agreement only if you violate the No Competition
provision.
Severance If your employment terminates for any reason, you will
not receive severance or termination pay. Except to
the extent the law or the terms of an applicable plan
requires otherwise, neither you nor your beneficiary or
estate will have any rights or claims under this
Agreement or otherwise to receive severance or any
other compensation or to participate in any other plan,
arrangement, or benefit, after your termination of
employment, other than with respect to your options.
No Competition The Company agrees to release you from the obligation
under your 1997 Agreement to notify the Company
regarding corporate opportunities.
Consistent with certain of your prior obligations under
the 1997 Agreement, you will not, until after the
fourth anniversary of the Closing Date, for any reason
whatsoever, directly or indirectly, for yourself or on
behalf of or in conjunction with any other person,
persons, company, partnership, corporation, or business
of whatever nature:
(i) engage, as an officer, director, shareholder,
owner, partner, joint venturer, or in a managerial
capacity, whether as an employee, independent
contractor, consultant, or advisor, or as a sales
representative, in any business selling any
products or services in direct competition with
the Company within 100 miles of where the Company
or where any of the Company's subsidiaries or
affiliates conducts business, including any
territory serviced by the Company or any of such
subsidiaries (the "Territory"), where "products or
services" are determined for this clause with
respect to products or services offered on or
before the date of this Agreement by the Company
and/or any of the Spincos;
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(ii) call upon any person who is, at that time,
within the Territory, an employee of the Company
(including the respective subsidiaries and/or
affiliates thereof) in a managerial capacity for
the purpose or with the intent of enticing such
employee away from or out of the Company's employ
(including the respective subsidiaries and/or
affiliates thereof) other than a member of your
immediate family; or
(iii) call upon any person or entity that is, at
that time, or that has been, within one year prior
to that time, a customer of the Company (including
the respective subsidiaries and/or affiliates
thereof) within the Territory for the purpose of
soliciting or selling products or services in
direct competition with the Company (including the
respective subsidiaries and/or affiliates thereof)
within the Territory.
In addition to (and not in lieu of) the restriction
contained in clause (ii) above, you agree that, during the
period that the restrictions contained in this No
Competition remain in effect, and so long as you are
employed by, or otherwise affiliated with, Consolidation
Capital Corporation ("CCC"), you will not, directly or
indirectly, offer employment with CCC to, or otherwise allow
CCC to employ, any person who
is employed by the Company or a subsidiary of the
Company at the time; or
was so employed by the Company or a subsidiary of
the Company within one year prior to such time; or
provides (or within the prior year provided)
substantial service to the Company or a subsidiary
of the Company as part of an entity that is or was
a vendor or other outside service provider to the
Company or any subsidiary; provided, however, that
this provision regarding vendors and outside
service providers will not apply after the Closing
Date. In addition, the Company specifically
agrees that you may hire Xxxxxx Xxxxx and Xxx
Xxxxxxxx, notwithstanding anything to the contrary
in the 1997 Agreement.
Notwithstanding the above, the foregoing covenant shall not
be deemed to prohibit you from acquiring capital stock in
CCC or serving as an officer, director or employee or
consultant to CCC, or acquiring as an investment not more
than one percent (1%) of the capital stock of a competing
business, whose stock is traded on a national securities
exchange or over-
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the-counter; provided that such actions do not otherwise
breach your obligations hereunder.
Because of the difficulty of measuring economic losses to
the Company as a result of a breach of the foregoing
covenant, and because of the immediate and irreparable
damage that could be caused to the Company for which it
would have no other adequate remedy, you agree that the
Company may enforce the No Competition provisions by
injunctions and restraining orders.
You and the Company agree that the No Competition provisions
impose a reasonable restraint on you in light of the
Company's activities and business (including the Company's
subsidiaries and/or affiliates) on the date of the execution
of this Agreement (including the Company's subsidiaries).
You and the Company further agree that, if you cease to be
employed hereunder and enter into a business or pursue other
activities not in competition with the Company (including
the Company's other subsidiaries), or similar activities or
business in locations the operation of which, under such
circumstances, does not violate clause (i) of this No
Competition provision, and in any event such new business,
activities, or location are not in violation of this No
Competition provision or of your obligations under this No
Competition provision, if any, you will not be chargeable
with a violation of this provision if the Company (including
the Company's subsidiaries) shall thereafter enter the same,
similar, or a competitive (i) business, (ii) course of
activities or (iii) location, as applicable.
The covenants in this No Competition provision are severable
and separate, and the unenforceability of any specific
covenant does not affect the provisions of any other
covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time, or
territorial restrictions set forth are unreasonable, then it
is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
All of the covenants in this No Competition provision shall
be construed as an agreement independent of any other
provision in this Agreement, and the existence of any claim
or cause of action by you against the Company, whether
predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of
such covenants. It is specifically agreed that the period
of four years stated at the beginning of
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this No Competition provision, during which your agreements
and covenants made in this provision shall be effective, are
computed by excluding from such computation any time during
which you are in violation of any provision of the No
Competition provision.
Notwithstanding any of the foregoing, if any applicable law
reduces the time period during which you are prohibited from
engaging in any competitive activity described in this
provision, you agree that the period for prohibition shall
be the maximum time permitted by law.
You specifically agree that the Company and the Spincos have
provided you with sufficient consideration for the extension
of your existing No Competition obligations to four years
and for the assignment of this provision to the Spincos.
After the Distributions, you agree that the Company will
assign to each Spinco the ability to enforce the
noncompetition provisions as to its own business.
Other The Company acknowledges that you are also employed by other
Employment entities, including Consolidation Capital Corporation, and
agrees that such dual employment does not breach this
Agreement, unless and to the extent that you thereby
violate the No Competition provisions.
Return of All records, designs, patents, business plans, financial
Company statements, manuals, memoranda, lists and other property
Property delivered to or compiled by you by or on behalf of the
Company (including the respective subsidiaries thereof) or
their representatives, vendors, or customers that pertain to
the business of the Company (including the respective
subsidiaries thereof) shall be and remain the property of
the Company, and be subject at all times to its discretion
and control. Likewise, you must deliver all correspondence,
reports, records, charts, advertising materials and other
similar data pertaining to the business, activities, or
future plans of the Company that you have collected or
obtained promptly to the Company without request by it upon
your cessation of employment.
Trade Secrets You agree that you will not, during or after the term of
this Agreement with the Company, disclose the specific terms
of the Company's (including the respective subsidiaries
thereof) relationships or agreements with its or their
respective significant vendors or customers or any other
significant and material trade secret of the Company
(including the respective subsidiaries thereof) whether in
existence or proposed, to any
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person, firm, partnership, corporation or business for any
reason or purpose whatsoever.
Indemnification If you are made a party to any threatened, pending, or
completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an
action by the Company against you), by reason of the fact
that you are or were performing services under this
Agreement or the 1997 Agreement then the Company must
indemnify you against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by you in connection
therewith to the fullest extent provided by Delaware law and
in accordance with the Company's Bylaws. Further, while you
are expected at all times to use your best efforts to
faithfully discharge your duties under this Agreement, the
Company will not hold you liable to itself for errors or
omissions made in good faith where you have not exhibited
gross, willful, or wanton negligence or misconduct or
performed criminal or fraudulent acts that materially damage
the business of the Company; provided, however, that this
sentence shall not apply to acts or omissions between the
effective date of the 1997 Agreement and the Closing Date.
No Prior Agreements You hereby represent and warrant to the Company that your
execution of this Agreement, your employment by the
Company, and the performance of your agreements hereunder
will not violate or be a breach of any agreement with a
former or current employer, client, or any other person or
entity. Further, you agree to indemnify the Company for any
claim, including, but not limited to, attorneys' fees and
expenses of investigation, by any such third party that such
third party may now have or may hereafter come to have
against the Company based upon or arising out of any
non-competition agreement, invention, or secrecy agreement
between you and such third party that was in existence as of
the date of this Agreement.
Complete This Agreement is not a promise of future employment. You
Agreement have no oral representations, understandings, oragreements
with the Company or any of its officers, directors, or
representatives cover ing the same subject matter as this
Agreement. This written Agreement is the final,
complete, and exclusive state ment and expression of the
agreement between the Company and you with respect to all
the terms of this Agreement, and it cannot be varie d,
contradicted, or supplemented by evidence of any prior or
contemporaneous oral or written agree ments. This
written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of
the Company and you, and no term of this Agreement
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may be waived except by writing signed by the party waiving
the benefit of such term.
Notice Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: U.S. Office Products Company
0000 Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: General Counsel
To Employee: Xxxxxxxx X. Xxxxxxx
0000 00xx Xx., X.X.
Xxxxxxxxxx, X.X. 00000
Notice shall be deemed given and effective three days after
the deposit in the U.S. mail of a writing addressed as above
and sent first class mail, certified, return receipt
requested, or when actually received. Either party may
change the address for notice by notifying the other party
of such change in accordance with this Notice provision.
Severability If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and
possible, effect shall be given to the intent manifested by
the portion held invalid or inoperative. This severability
provision shall be in addition to, and not in place of, the
comparable provisions in the No Competition provision.
Governing Law This Agreement shall in all respects be construed according
to the laws of the State of Delaware, other than those
relating to conflicts of laws. Any decision as to breaches
of this Agreement or any provision herein shall be made
pursuant to a final, nonappealable decision of a court.
Binding Effect This Agreement binds and benefits the Company and each of
and Assignment the Spincos, each of their respective successors or assigns,
and your heirs and the personal representatives of your
estate. Without the Company's prior written consent, you
may not assign or delegate this Agreement or any or all
rights, duties, obligations, or interests under it. You
specifically agree that the Company may assign its rights
under No Competition, in whole or in part, to each Spinco
with respect to such Spinco's business.
Superseding Contingent upon the Closing and effective only in that
event,
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Effect this Agreement supersedes any prior oral or written
employment or severance agreements between you and the
Company (including specifically your 1997 Agreement
(including but not limited to its Change of Control
provisions) but specifically excluding your options to
purchase Company stock). Contingent upon the Closing and
effective only in that event, the 1997 Agreement will
terminate as of the Closing Date. Except as set forth
above, this Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements, and
writings with respect to the subject matter of this
Agreement. All such other negotiations, commitments,
agreements, and writings will have no further force or
effect; and the parties to any such other negotiation,
commitment, agreement, or writing will have no further
rights or obligations thereunder.
Negotiated You agree that you have consulted with counsel of your own
Agreement selection and have negotiated the terms of this Agreement
with the Company. You and the Company agree that this
Agreement should not be construed against either party as
the "drafter."
U.S. Office Products Company
Date: January 13, 1998 By: /s/ Xxxxxx Xxxxxx
-------------------- --------------------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
I agree to and accept these terms:
Date: January 13, 1998 /s/ Xxxxxxxx X. Xxxxxxx
-------------------- ---------------------------------
Xxxxxxxx X. Xxxxxxx
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