EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made as of
March 22, 2000 by and between Xxxxxx X. Xxxxxx ("Executive") and ANICOM, INC., a
Delaware corporation (the "Company").
PRELIMINARY RECITALS
WHEREAS, the Company is engaged in the business of selling and
distributing communication related wire, cable, fiber optics and computer
network and connectivity products (the "Business").
WHEREAS, Executive has extensive knowledge and a unique understanding
of the operation of the Business.
WHEREAS, the Company desires to employ Executive as the Chairman of the
Board of Directors, all under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Executive agree as follows:
1. Employment of Executive. The Company hereby employs Executive as the
Company's Chairman of the Board of Directors and as the Chairman of the
Company's Executive Management Committee (collectively, the "Chairman"), and
Executive hereby accepts such employment and agrees to act as Chairman, all in
accordance with the terms and conditions of this Agreement.
2. Term of Employment. Subject to the termination provisions set forth in
Section 7 below, Executive's employment under this Agreement shall commence on
the Commencement Date and shall continue until December 31, 2002 (the
"Employment Period"), subject to the termination provisions set forth in Section
7. This Agreement may be extended at any time by mutual written agreement of the
parties.
3. Offices and Duties. Subject to Section 7, during the Employment Period,
Executive will perform such duties as the Board of Directors of the Company
("Board") may prescribe from time to time, consistent with Executive's title.
Executive agrees that during the Employment Period, he will devote a reasonable
amount of his business time and attention as is necessary to fulfill his duties
under this Agreement. During the Employment Term Executive may engage in outside
business activities, to the extent that the activities do not conflict with the
Company's interests or interfere with the performance of Executive's duties
hereunder.
4. Compensation.
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4.1 Base Salary. During the Employment Period, the Company
will pay Executive a base salary (i) at a rate of $175,000 per annum
during the calendar year ending December 31, 2000, pro-rated to reflect
the actual time Executive serves as Chairman, (ii) at a rate of
$200,000 per annum during the calendar year ending December 31, 2001,
and (iii) at a rate of $250,000 per annum during the calendar year
ending December 31, 2002 (the "Base Salary"), payable in accordance
with the Company's normal payroll practices for executive officers.
4.2 Bonus Payments. Executive shall be eligible to receive an
annual bonus ("Bonus Payments"), based upon Executive's and the
Company's performance and the achievement of targeted net income set by
management and approved by the Board ("Targeted Net Income"), in the
following amounts:
(a) If less than 75% of Targeted Net Income is achieved,
Executive will not receive a Bonus Payment.
(b) If 75% to 125% of Targeted Net Income is achieved,
Executive will receive a Bonus Payment of $100,000.
(c) If 125% to 150% of Targeted Net Income is achieved,
Executive will receive a Bonus Payment of $150,000.
(d) If over 150% of Targeted Net Income is achieved,
Executive will receive a Bonus Payment of $200,000.
The Targeted Net Income for the calendar year ending December 31, 2000
will be $9,180,000. The Bonus Payment for the calendar year ending
December 31, 2000 will be calculated for the full year, and then
adjusted pro-rata to reflect the portion of the year for which
Executive served as Chairman. The Targeted Net Income in subsequent
years will be set by management and approved by the Board prior to
March 1 of each year.
4.3 Stock Options. As of the Commencement Date, Executive
shall be granted options to purchase up to 50,000 shares of the
Company's common stock ("Options"). Beginning with the calendar year
ending December 31, 2001, Executive shall receive an annual grant of
Options to purchase up to 50,000 shares of the Company's common stock,
if 100% of Targeted Net Income for such calendar year has been
achieved. If over 100% of Targeted Net Income is achieved, the award of
the 50,000 Options may be adjusted upward by the Compensation
Committee, in its sole discretion. The Options granted hereunder shall
be granted by the Compensation Committee as soon as practicable after
the Company's year-end earnings release, but in no event shall Options
be granted later than 60 days after the last day of the fiscal year in
which the annual Option grant is earned. The agreement granting such
Options shall be similar in form to Option agreements for other
executives of the Company, except that Options granted hereunder shall
vest immediately and the term of the Option agreement shall be for ten
years notwithstanding anything to the contrary contained in this
Agreement or the plan pursuant to which Options are granted.
4.4 Transaction Bonus. If a Change in Control occurs after the
date of this Agreement but before the Commencement Date, the Company
(or its successor or assigns) shall pay to Executive a transaction
bonus of $100,000, payable in cash within fifteen (15) business days
following the effective date of the Change in Control. If a Change in
Control occurs after the Commencement Date but during the term of this
Agreement (the "Scheduled Term"), the Company (or its successor or
assigns) shall pay to Executive a transaction bonus of $500,000,
payable in cash within fifteen (15) business days following the
effective date of the Change in Control, regardless of whether
Executive remains employed by the Company as of such effective date or
any time prior thereto. This provision shall survive any termination of
this Agreement.
4.5 Benefits. Executive will be entitled to participate in
group life and medical insurance plans, profit-sharing and similar
plans, and other "fringe benefits" (collectively, "Benefits"),
comparable to those made available by the Company to its other senior
executive employees, in accordance with the terms of such plans. Upon
mutual agreement of Executive and Company, Executive may receive an
annual lump sum payment equal to the value of the Benefits in
consideration for Executive's agreement not to participate in such
plans.
4.6 Vacation. Executive shall be entitled to take such
vacation as is reasonable, provided that such vacation does not
conflict with the Company's interests or interfere with the performance
of Executive's duties hereunder, with pay.
4.7 Withholding. All compensation payable to Executive under
this Agreement is stated in gross amount and will be subject to all
applicable withholding taxes, other normal payroll deductions, and any
other amounts required by law to be withheld.
4.8 Expenses. The Company, in accordance with its policies and
past practices, will pay or reimburse Executive for all expenses
(including travel and entertainment expenses) reasonably incurred by
Executive during the Employment Period in connection with the
performance of Executive's duties under this Agreement, provided that
Executive, if so requested by the Board, must provide to the Company
documentation or evidence of expenses for which Executive seeks
reimbursement.
4.9 Miscellaneous. The Company will provide Executive with
appropriate office space, administrative support and parking.
5. Covenant Not to Compete.
5.1 Executive's Acknowledgment. Executive agrees and
acknowledges that in order to assure the Company that it will retain
its value and that of the Business as a going concern, it is necessary
that Executive undertake not to utilize his special knowledge of the
Business and his relationships with customers and suppliers to compete
with the Company. Executive further acknowledges that:
(a) the Company is currently engaged in the Business;
(b) Executive has occupied a position of trust and
confidence with the Company prior to the date of this
Agreement and will continue to acquire an intimate
knowledge of all proprietary and confidential
information concerning the Business;
(c) the agreements and covenants contained in this
Section 5 are essential to protect the Company and
the goodwill of the Business;
(d) the Company would be irreparably damaged if Executive
were to provide services to any person or entity in
violation of the provisions of this Agreement;
(e) the scope and duration of the Restrictive Covenants
are reasonably designed to protect a protectible
interest of the Company and are not excessive in
light of the circumstances; and
(f) Executive has a means to support himself and his
dependents other than by engaging in the Business, or
a business similar to the Business, and the
provisions of this Section 5 will not impair such
ability.
5.2 Non-Compete. The "Restricted Period" for purposes of this
Agreement shall commence on the Commencement Date and shall continue
until December 31, 2002; provided that, if Executive's employment with
the Company is terminated by Executive for Good Reason or by the
Company without Cause, or by Executive without Good Reason after
January 1, 2002 or upon a Change in Control, then the payments to which
Executive is entitled under Section 8.1 or 8.2, as the case may be,
shall be paid to Executive in consideration for the survival of the
Restricted Period beyond the Effective Date. Following a Change in
Control, at the end of the Restricted Period the Company may extend the
Restricted Period for up to 24 additional months by continuing to pay
Executive one-half of his most recent Base Salary. Executive hereby
agrees that at all times during the Restricted Period, Executive shall
not, directly or indirectly, as executive, agent, consultant,
stockholder, director, co-partner or in any other individual or
representative capacity, own, operate, manage, control, engage in,
invest in or participate in any manner in, act as a consultant or
advisor to, render services for (alone or in association with any
person, firm, corporation or entity), or otherwise assist any person or
entity that engages in or owns, invests in, operates, manages or
controls any venture or enterprise that directly or indirectly engages
or proposes to engage in the Business anywhere within the United States
and Canada (the "Territory"); provided, however, that nothing contained
herein shall be construed to prevent Executive from investing in the
stock of any competing corporation listed on a national securities
exchange or traded in the over-the-counter market, but only if
Executive is not involved in the business of said corporation and if
Executive and his associates (as such term is defined in Regulation
14(A) promulgated under the Securities Exchange Act of 1934, as in
effect on the date hereof), collectively, do not own more than an
aggregate of two percent (2%) of the stock of such corporation.
5.3 Non-Solicitation. Without limiting the generality of the
provisions of Section 5.2 above, Executive hereby agrees that, during
the Restricted Period, Executive will not, directly or indirectly,
solicit, or participate as executive, agent, consultant, stockholder,
director, partner or in any other individual or representative capacity
in any business which solicits, business from any Person which is or
was a customer or vendor of the Business during the Restricted Period,
or from any successor in interest to any such Person for the purpose of
marketing, selling or providing any such Person any services or
products offered by or available from the Company, or encouraging any
such Person to terminate or otherwise alter his, her or its
relationship with the Company.
5.4 Interference with Employee Relationships. During the
Restricted Period, Executive shall not, directly or indirectly, as
executive, agent, consultant, stockholder, director, co-partner or in
any other individual or representative capacity, without the prior
written consent of the Company, employ or engage, recruit or solicit
for employment or engagement, any individual who is employed or engaged
by the Company at that time, or has been employed or engaged by the
Company during the six (6) months prior thereto, or otherwise seek to
influence or alter any such individual's relationship with the Company.
5.5 Blue-Pencil. If any court of competent jurisdiction shall
at any time deem the term of this Agreement or any particular
Restrictive Covenant too lengthy or the Territory too extensive, the
other provisions of this Section 5 shall nevertheless stand, and the
Restricted Period shall be deemed to be the longest period permissible
by law under the circumstances and the Territory shall be deemed to
comprise the largest territory permissible by law under the
circumstances. The court in each case shall reduce the Restricted
Period and/or the Territory to permissible duration or size.
6. Confidential Information. During the term of this Agreement and thereafter,
Executive shall keep secret and retain in strictest confidence, and shall not,
without the prior written consent of the Company, furnish, make available or
disclose to any Person or use for the benefit of himself or any Person, any
Confidential Information, except to the extent reasonably necessary to carry out
Executive's duties and responsibilities to the Company. As used in this Section
7, "Confidential Information" shall mean any information relating to the
Business or affairs of the Company, including but not limited to information
relating to financial statements, business plans, forecasts, purchasing plans,
customer identities, potential customers, employees, suppliers, equipment,
programs, strategies and information, analyses, profit margins or other
proprietary information used by the Company in connection with the Business of
the Company; provided, however, that Confidential Information shall not include
any information which is in the public domain or becomes known in the industry
through no wrongful act on the part of Executive. Executive acknowledges that
the Confidential Information is vital, sensitive, confidential and proprietary
to the Company.
7. Termination.
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7.1 Without Cause. The Company may terminate Executive's
employment hereunder at any time, without Cause (as defined in Section
9), upon not less than ninety (90) days notice to Executive. Upon
notice of such termination from the Company, the Company may (i)
require Executive to continue to perform his duties hereunder on the
company's behalf during such notice period, (ii) limit or impose
reasonable restrictions on Executive's activities during such notice
period as it deems necessary, or (iii) choose any date within the
notice period as the Effective Date (as hereinafter defined) of
Executive's termination, provided, however, that the Company will
continue to pay Executive's Base Salary during such notice period.
7.2 For Cause. The Company may terminate Executive's
employment hereunder at any time for Cause by providing to Executive
written notice of termination stating the grounds for termination for
Cause and such termination shall take effect immediately upon notice of
termination. The decision to terminate Executive's employment for
Cause, to take other action or to take no action in response to such
occurrence shall be in the sole and exclusive discretion of the Board.
7.3 By Executive. Executive may terminate his employment
hereunder at any time, with or without Good Reason (as defined in
Section 9), upon not less than ninety (90) days notice (thirty (30)
days notice if Executive terminates following a Change in Control) to
the Company. Upon notice of such termination from Executive, the
Company may (i) require Executive to continue to perform his duties
hereunder on the Company's behalf during such notice period, (ii) limit
or impose reasonable restrictions on Executive's activities during such
notice period as it deems necessary, or (iii) accept Executive's notice
of termination as Executive's resignation from the Company (including a
resignation from any position as director of the Company) at any time
during such notice period. If the Company at any time during the notice
period chooses to accept Executive's notice of termination as
Executive's resignation from the Company, then the effective date of
such termination shall be the date as of which such resignation is
accepted.
7.4 Death or Disability. The Employment Period will terminate
immediately upon the death or Disability of Executive.
7.5 Salary and Benefit Accruals. Following the effective date
of termination by Executive without Good Reason or by the Company for
Cause, Executive will not be entitled to receive any further
compensation (whether in the form of Base Salary, Bonus Payments, or
Benefits or otherwise) other than those payments set forth in Section
8.2 below and accrued but unpaid Base Salary through the Effective
Date. Upon termination by the Company without Cause, termination by
Executive for Good Reason, death or Disability, Executive (or his
estate) will be entitled to receive (i) all accrued but unpaid Base
Salary through the Effective Date, (ii) Bonus Payment for the year in
which such termination occurs, determined by multiplying the prior
year's Bonus Payment by a fraction equal to the number of days elapsed
in the current year through the effective date of termination (the
"Effective Date") divided by 365, and (iii) any amounts payable
pursuant to Section 8.1 below, but all other obligations of the Company
to pay Executive any further compensation, whether in the form of Base
Salary, Bonus Payments, or Benefits (other than death and Disability
benefits, if any) or otherwise, will terminate.
8. Additional Obligations Upon Termination.
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8.1 Termination Without Cause. If Executive's employment with
the Company is terminated at any time during the Employment Period (i)
by the Company without Cause, or (ii) by Executive for Good Reason, or
(iii) due to the death or Disability of Executive, then in addition to
the amounts payable in accordance with Section 7.5 above, and in
consideration for the Restrictive Covenants, the Company shall pay and
provide to Executive the following:
(a) Within thirty (30) days after the Effective Date the
Company shall pay to Executive or his estate, a lump
sum cash payment, in an amount equal to the
Termination Payment;
(b) for the remainder of the Scheduled Term, Executive
and his dependents shall continue to be covered by
all survivor rights, insurance and benefit programs
in type and amount at least equivalent to those
provided to him and his dependents by the Company
immediately prior to the Effective Date;
(c) any stock options then held by Executive or his
permitted assignees shall immediately vest as of the
Effective Date; and
(d) the Company, at its sole expense, shall provide
Executive with outplacement services consistent with
those services customarily provided by the Company to
its senior executive employees.
8.2 Termination by Executive.
(a) If, in the absence of a Change in Control,
Executive terminates without Good Reason after January 1, 2002,
then, in consideration for the survival of the Restricted
Period beyond the Effective Date, in addition to the amounts
payable in accordance with Section 7.5 above, the Company shall
pay and provide to Executive: (i) an annual amount during the
balance of the Scheduled Term equal to one-half of Executive's
highest total compensation (consisting of Base Salary and Bonus
Payment, where the Bonus Payment is equal to the Bonus Payment
for the calendar year in which the Effective Date occurs,
calculated assuming the higher of (i) 100% net income
achievement for the full year or (ii) year-to-date net income
attainment, extended on a pro-forma basis through the end of
the calendar year); and (ii) all Benefits specified under
Section 8.1(b) above. For purposes of providing Executive
Benefits under Section 8.1(b), Benefits shall be equivalent to
those provided to Executive and his dependents immediately
prior to the Effective Date; provided that, if participation in
any one or more of such arrangements is not possible under the
terms thereof, the Company will provide substantially identical
Benefits outside of the programs and cost of this coverage
shall be paid by the Company.
(b) If, after the twelve (12) month period following
a Change in Control, Executive terminates his employment with
the Company without Good Reason, then in addition to the
amounts payable in accordance with Section 7.5 above, within
five (5) business days after the Effective Date, the Company
shall pay and provide to Executive: (i) a lump sum cash
payment, in an amount equal to (x) one-half of Executive's
total compensation (consisting of Base Salary and Bonus
Payment, where the Bonus Payment is equal to the Bonus Payment
for the calendar year in which the Effective Date occurs,
calculated assuming the higher of (i) 100% net income
achievement for the full year or (ii) year-to-date net income
attainment, extended on a pro-forma basis through the end of
the calendar year), multiplied by (y) the number of years
remaining in the Scheduled Term; and (ii) all Benefits
specified under Sections 8.1(b), 8.1(c) and 8.1(d) above. For
purposes of providing Executive Benefits under Section 8.1(b),
Benefits shall be equivalent to those provided to Executive
and his dependents immediately prior to the Change in Control;
provided that, if participation in any one or more of such
arrangements is not possible under the terms thereof, the
Company will provide substantially identical Benefits outside
of the programs and cost of this coverage shall be paid by the
Company.
8.3 No Mitigation. Executive shall not be required to mitigate
damages or the amount of any payment provided for or referred to in
this Section 8 by seeking other employment or otherwise, nor shall the
amount of any payment provided for or referred to in this Section 8 be
reduced by any compensation earned by the Executive as the result of
employment by another employer after the termination of the Executive's
employment, or otherwise.
8.4 Release. As a condition to Executive's right to receive
any severance payments and Benefits made hereto in this Section 8, the
Company shall require that (i) Executive execute and deliver to the
Company a general release, whereby Executive shall release the Company,
it successor, assigns, officers, directors and agents from any and all
claims, liabilities and obligations relating to or arising out of this
Agreement, and (ii) Executive shall not be in breach of any Restrictive
Covenant.
8.5 Termination in Anticipation of a Change in Control. If the
Company terminates Executive's employment without Cause during the
period commencing six (6) months prior to the earlier of (i) public
announcement by the Company of a Change in Control, or (ii) the
execution by the Company of a definitive agreement with regard to a
Change in Control, and ending on (and including) the date of the Change
in Control, such termination shall be regarded as a termination after
such Change in Control for purposes of this Agreement, including
without limitation, for purposes of Sections 5.5 and 9.
9. Definitions. As used in this Agreement:
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"Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company including, without limitation, any member of an affiliated group of
which the Company is a common parent corporation as provided in Section 1504 of
the Code.
"Anixter Family" means Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, their spouses, heirs and any group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of which any of the foregoing persons is a member for purposes of
acquiring, holding or disposing of securities of the Company, any trust
established by or for the benefit of any of the foregoing and any other entity
controlled by or for the benefit of any of the foregoing.
"Commencement Date" means the date of the next annual meeting of the
Company following the date of execution of this Agreement, currently scheduled
for May 17, 2000, when Executive will assume the position of Chairman.
"Cause" means (a) an act of fraud or dishonesty by Executive that
results in material gain or personal enrichment of Executive at the Company's
expense, (b) Executive's conviction of a felony-class crime (other than relating
to the operation of a motor vehicle), (c) any material breach by Executive of
any provision of this Agreement that, if curable, has not been cured by
Executive within thirty days of written notice of such breach from the Company,
(d) Executive willfully engaging in gross misconduct materially injurious to the
Company that, if curable, has not been cured by Executive within thirty days of
written notice specifying the alleged willful gross misconduct and material
injury, or (e) any intentional act or gross negligence on the part of Executive
that has a material, detrimental effect on the reputation or Business of the
Company. The decision to terminate Executive's employment for Cause, to take
other action or to take no action in response to such occurrence shall be in the
sole and exclusive discretion of the Board.
"Change in Control" means the happening of any of the following events:
(a) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or
more of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not
constitute a Change in Control: (A) any acquisition by the
Company or by an employee benefit plan (or related trust)
sponsored or maintained by the Company or an Affiliate, (B)
any acquisition by a member or members of the Anixter Family,
(C) any acquisition by a lender to the Company pursuant to a
debt restructuring of the Company, (D) any acquisition by, or
consummation of a Corporate Transaction with an Affiliate, (E)
a Non-Control Transaction, or (F) an acquisition by a Person
of the beneficial ownership of twenty percent (20%) or more,
but less than fifty percent (50%) of the combined voting power
of the then Outstanding Company Voting Securities unless
Executive's employment is terminated by the Company without
Cause or by Executive for Good Reason, within twenty-four (24)
months following such acquisition;
(b) A change in the composition of the Board such that the
individuals who, as of the date hereof, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent
Board")) cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this
Section 9(b), that any individual who becomes a member of the
Board subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this
provision) shall be considered as though such individual were
a member of the Incumbent Board; but, provided, further, that
any such individual whose initial assumption of office occurs
as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board shall not be so considered as
a member of the Incumbent Board;
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company (a "Corporate Transaction"), in each
case, unless the Corporate Transaction is a Non-Control
Transaction; or
(d) Approval by stockholders of the Company of a complete
liquidation or dissolution of the Company.
"Disability" will be deemed to have occurred whenever Executive has
suffered physical or mental illness, injury, or infirmity that renders Executive
unable to perform the essential functions of his job with or without reasonable
accommodation.
"Good Reason" means the occurrence of any of the following events,
unless (i) such event occurs with Executive's express prior written consent,
(ii) the event is an isolated, insubstantial or inadvertent action or failure to
act which was not in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by Executive, or (iii) the event occurs in
connection with termination of Executive's employment for Cause, Disability or
death:
(b) the assignment to Executive by the Company of any duties which
are, in any material respect, inconsistent with, a diminution
of or an adverse change in Executive's position, duty, title,
office, responsibility or status with the Company, including
without limitation, any material diminution of Executive's
position or responsibility in the decision or management
processes of the Company, reporting relationships, job
description, duties, responsibilities, or any removal of
Executive from, or any failure to reelect Executive to, such
position;
(c) a reduction by the Company in Executive's rate of Base Salary
during the Employment Period;
(d) any failure to either continue in effect any material Benefits
or to substitute and continue other plans, policies, programs
or arrangements providing Executive with substantially similar
Benefits, or the taking of any action which would
substantially and adversely affect Executive's participation
in or materially reduce Executive's Benefits or compensation;
(e) any failure by any successor or assignee of the Company to
continue this Agreement in full force and effect or any breach
of this Agreement by the Company (or any successor or assignee
of the Company), unless such breach is cured within thirty
(30) days of receiving written notice of the breach from
Executive; or
(f) following a Change in Control, the relocation of the executive
offices of the Company to a location that is more than fifty
(50) miles from the executive offices of the Company as of the
effective date of such Change in Control.
"Non-Control Transaction" means a Corporate Transaction as a result of
which the Outstanding Company Voting Securities immediately prior to such
Corporate Transaction would entitle the holders thereof immediately prior to
such Corporate Transaction to exercise, directly or indirectly, more than fifty
percent (50%) of the combined voting power of all of the shares of capital stock
entitled to vote generally in election of directors of the corporation resulting
from such Corporate Transaction immediately after such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries).
"Person" means any individual, corporation, trust, proprietorship,
association, governmental body, agency or subdivision or other entity.
"Termination Payment" means an amount equal to (i) two-thirds of
Executive's highest total compensation (consisting of Base Salary and Bonus
Payment) in any of the five(5) years prior to the year in which the Effective
Date occurs, multiplied by (ii) the number of years remaining in the Scheduled
Term.
10. Remedies. Executive acknowledges and agrees that the covenants set forth in
Sections 6 and 7 of this Agreement (collectively, the "Restrictive Covenants")
are reasonable and necessary for the protection of the Company's business
interests, that irreparable injury will result to the Company if Executive
breaches any of the terms of the Restrictive Covenants, and that in the event of
Executive's actual or threatened breach of any such Restrictive Covenants, the
Company will have no adequate remedy at law. Executive accordingly agrees that
in the event of any actual or threatened breach by him of any of the Restrictive
Covenants, the Company shall be entitled to immediate temporary injunctive and
other equitable relief, without bond and without the necessity of showing actual
monetary damages, subject to hearing as soon thereafter as possible. Nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach, including
the recovery of any damages which it is able to prove.
11. Miscellaneous.
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(a) Notices. All notices and other communication between the parties
pursuant to this Agreement must be in writing and will be deemed given
when delivered in person, one (1) business day after being dispatched
by a nationally recognized overnight courier service, three (3)
business days after being deposited in the U.S. Mail, registered or
certified mail, return receipt requested, or when sent by facsimile
(with receipt acknowledged and a copy sent for next day delivery by a
nationally recognized overnight courier service), to the Company at the
address or facsimile number of its principal office in the Chicago,
Illinois metropolitan area and to Executive (or his representatives) at
his address or facsimile as shown on the Company's records. Executive
(or his representatives) may change his address or facsimile number for
notice purposes by delivering notice to the Company in accordance with
this Section 11(a). All notices sent to the Company shall also be
delivered to Xxxxxx Xxxxxx Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxxx X. Xxxx, Esq.,
Facsimile No.: (312-902-1061).
(b) Governing Law. This Agreement will be subject to and governed by the
laws of the State of Illinois, without regard to principles of
conflicts of laws.
(c) Binding Effect. This Agreement will be binding upon and inure to the
benefit of the parties and their respective heirs, legal
representatives, executors, administrators, successors, and assigns,
subject to the limitations on assignment in Section 11(h).
(d) Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter of this
Agreement and supersedes any other agreements, whether oral or written,
between the parties with respect to the subject matter of this
Agreement.
(e) Modification. No change or modification of this Agreement will be valid
unless it is in writing and signed by both of the parties. No waiver of
any provision of this Agreement will be valid unless in writing and
signed by the person or party to be charged.
(f) Severability. If any provision of this Agreement is, for any reason,
invalid or unenforceable, the remaining provisions of this Agreement
will nevertheless be valid and enforceable and will remain in full
force and effect. Any provision of this Agreement that is held invalid
or unenforceable by a court of competent jurisdiction will be deemed
modified to the extent necessary to make it valid and enforceable and
as so modified will remain in full force and effect.
(g) Headings. The headings in this Agreement are inserted for convenience
only and are not to be considered in the interpretation of construction
of the provisions of this Agreement.
(h) Assignability. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that the
Company may assign its rights to, and cause its obligations under this
Agreement to be assumed by, any person or entity to whom or to which
the Company simultaneously transfers by sale, merger, or otherwise all
or substantially all of its assets.
(i) No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by Executive and the Company to
express their mutual intent, and no rule of strict construction will be
applied against Executive or the Company.
(j) Arbitration. Except for any claim or dispute which gives rise or could
give rise to equitable relief under this Agreement, at the request of
Executive, or the Company, any disagreement, dispute, controversy or
claim arising out of or relating to this Agreement or the breach hereof
shall be settled exclusively and finally by arbitration. The
arbitration shall be conducted in accordance with such rules and before
such arbitrator as the parties shall agree and if they fail to so agree
within fifteen (15) days after demand for arbitration, such arbitration
shall be conducted in accordance with the Federal Arbitration Act and
the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association which are then in effect (hereinafter
referred to as "AAA Rules"). Such arbitration shall be conducted in
Chicago, Illinois, or in such other city as the parties to the dispute
may designate by mutual consent. The arbitral tribunal shall consist of
three arbitrators (or such lesser number as may be agreed upon by the
parties) selected according to the procedure set forth in the AAA Rules
in effect on the date hereof and the arbitrators shall be empowered to
order any remedy which is appropriate to the proceedings and issues
presented to them. Any party to a decision rendered in such arbitration
proceedings may seek an order enforcing the same by any court having
jurisdiction.
(k) Legal Expenses. The Company shall pay the legal expenses incurred by
Executive for review of this Agreement by his legal counsel, up to an
amount not to exceed $10,000. If Executive takes legal action to
enforce the Company's obligations under this Agreement and Executive
prevails in such action, the Company shall reimburse Executive for all
reasonable expenses (including reasonable attorney's fees) actually
incurred by Executive in such action.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement as of the date first above written.
ANICOM, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------
Xxxx X. Xxxxxx, President
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
