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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
XXXXXX X. XXXXXX & OAKHURST COMPANY, INC.
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made effective as of this 1st
day of March 1998 by and between OAKHURST COMPANY, INC. (the "Company") and
XXXXXX X. XXXXXX ("Xx. Xxxxxx") upon the following terms and conditions:
1. BACKGROUND. The Company and Xx. Xxxxxx entered into a consulting agreement
dated as of May 27, 1997 (the "Consulting Agreement"). The parties now wish
to replace the Consulting Agreement in its entirety with this Agreement.
2. CONSIDERATION. The parties are entering into this Agreement for and in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
3. TERM. The term of this Agreement and of Xx. Xxxxxx' employment shall
commence as of the date hereof and shall continue through and including
February 28, 2001 (the "Term") unless sooner terminated as provided in
Section 9, below.
4. SERVICES.
(a) Xx. Xxxxxx shall provide to the Company the services of a President
and Chief Executive Officer.
(b) In the event that for any reason Xx. Xxxxxx is not elected a director
of the Company and as a result is not eligible to be President of the
Company, Xx. Xxxxxx shall perform such other tasks and
responsibilities consonant with his experience and abilities as the
Board of Directors shall reasonably request. In addition, Xx. Xxxxxx
shall serve as Chairman of the Board of Directors if elected to that
position by the Board.
(c) Xx. Xxxxxx shall devote such time to the rendering of such services as
he and a majority of the Board of Directors consider to be appropriate
and commensurate with the responsibilities of those offices and he
shall perform such services subject to the general direction of the
Board of Directors.
(d) No restrictions shall be placed on other activities of Xx. Xxxxxx
provided that such activities (i) are not competitive with those of
the Company or any of its affiliates; (ii) do not create a conflict of
interest for Xx. Xxxxxx; and (iii) do not interfere with the
fulfillment by Xx. Xxxxxx of his obligations under this Agreement.
5. THE BOARD OF DIRECTORS. For purposes of this Agreement, an action or
determination by "a majority of the Board of Directors" shall mean an
action or determination taken and reduced to writing in the good faith
exercise of their discretion by more than half of the directors of the
Company then in office, but (i) with Xx. Xxxxxx abstaining from such vote
and (ii) excluding Xx. Xxxxxx from the count of the total number of
directors then in office.
6. SALARY. During the Term --
(a) The Company shall pay Xx. Xxxxxx a salary of five thousand dollars
$(5,000) per month.
(b) Xx. Xxxxxx' salary shall be increased to seven thousand five hundred
dollars $(7,500) per month upon the first to occur during the Term, if
at all, of --
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(i) the payment to the Company's joint venture with The Forestal
Group, Inc. and PB-KBB Leasing, Inc. (the "Joint Venture") of the
first transaction fee pursuant to the agreement between the Joint
Venture and a major investment bank (the "Investment Bank"); and
(ii) the consummation of a strategic or structural transaction (as
distinguished from a transaction consisting of a customary
services and/or supply agreement) with a customer.
(c) Xx. Xxxxxx' salary shall be further increased to ten thousand dollars
$(10,000) per month if during the Term, a majority of the Board of
Directors determines that the Company has achieved a substantial
realization of the value of the Company's net operating loss
carryforwards.
(d) Xx. Xxxxxx' salary shall be paid at the same time and in the same
installments as the salaries of other officers of the Company are
paid.
7. BONUS COMPENSATION.
(a) Definitions. For purposes of this Section 7, the following terms shall
have the following meanings:
(i) "Transaction Fees" shall mean fees received from time to time, if
at all, by the Company from --
(1) the Joint Venture in connection with its agreement with the
Investment Bank; and
(2) any participants, other than the Company, in any
transactions that utilize net operating loss carryforwards
as described in the Agreement dated August 1, 1995 between
the Company, PB-KBB Leasing, Inc. and The Forestal Group,
Inc. as amended June 25, 1997, August 27, 1997 and February
1, 1998.
(ii) "Net Transaction Fees" shall mean Transaction Fees less all
un-reimbursed expenses incurred by the Company in connection with
the generation of Transaction Fees.
(iii) The "30% Bonus" shall mean thirty percent (30%) of the Net
Transaction Fees, subject, however, to the time and amount
limitations set forth in this Section 7, below.
(b) If Net Transaction Fees are generated from time to time by the receipt
by the Company of Transaction Fees, the Company shall pay the 30%
Bonus by a Company check made payable jointly to Xx. Xxxxxx and
Bryanston Management Limited (a consultant to the Company pursuant to
a consulting agreement of even date herewith) ("Bryanston") unless
prior to such payment, Xx. Xxxxxx and Bryanston shall each request the
Company in a writing signed by each of them to distribute or divide
the 30% Bonus between them in some other manner that they have agreed
upon.
(c) The 30% Bonus shall only be paid by the Company to the extent that
there are Net Transaction Fees and then only with respect to
Transaction Fees that are received by the Company prior to 5:00 p.m.
on the fifth anniversary of the effective date of this Agreement.
(d) The obligation of the Company to pay the 30% Bonus shall continue
during the Term and after the expiration or earlier termination of
this Agreement (subject to Section 7(c), above), except that (i) if
Xx. Xxxxxx' employment is terminated by the Company for Cause, no
portion of the 30% Bonus shall be paid to him (whether or not then
accrued) after the date of such a termination; and (ii) the Company
shall have no obligation to make any payment
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of the 30% Bonus after it has paid to Xx. Xxxxxx and/or Bryanston, in
the aggregate, $2 million on account thereof.
(e) The 30% Bonus shall be paid within fifteen (15) days after the date
the Company receives Transaction Fees that result in Net Transaction
Fees. For purposes of calculating the Net Transaction Fees from time
to time, the Company may estimate the amount of any un-billed expenses
relating to the Transaction Fees received. In the event that the
Company determines that it has over estimated the amount of such
expenses (and therefore has under paid the 30% Bonus), the Company
shall promptly pay the additional amount of the 30% Bonus due. In the
event that the Company determines that it has under estimated the
amount of such expenses (and has therefore over paid the 30% Bonus),
Xx. Xxxxxx shall promptly pay to the Company the amount of such
overpayment upon a written request therefor. If any such amount is not
re-paid, the Company may deduct the same from any additional amount of
the 30% Bonus that may become due. The Company, however, shall only be
entitled to collect once any given over payment.
8. BUSINESS EXPENSES AND USE OF COMPANY EQUIPMENT.
(a) Xx. Xxxxxx shall be entitled to be reimbursed, or to the use of a
Company credit card, for reasonable business expenses incurred by him
in the performance of his duties and responsibilities hereunder,
including, but not limited to, travel from his office and/or residence
to the Company's facilities, all in accordance with policies
established for the Company by the Board of Directors from time to
time. Xx. Xxxxxx' Company credit card charges and expense reports will
be subject to review by the Audit Committee of the Board of Directors.
(b) The Company shall make available in its discretion to Xx. Xxxxxx the
use of certain Company-owned office equipment from time to time.
9. TERMINATION.
(a) Termination By the Company. Xx. Xxxxxx' employment may be terminated
only by a majority of the Board of Directors and only as follows:
(i) For Cause (as defined below), by written notice to Xx. Xxxxxx, in
which event the Company shall pay to him so much of his salary as
was accrued, but not paid at the date of termination.
(ii) Without Cause, by written notice to Xx. Xxxxxx, in which event,
the Company shall pay to Xx. Xxxxxx his salary at the rate then
in effect that was accrued, but not paid at the date of
termination, and within fifteen (15) days of such termination,
shall pay in a lump sum his salary at the rate then in effect
multiplied by the greater of (1) twenty-four (24); or (2) the
number of whole calendar months remaining in the Term at the date
the notice of termination is given to Xx. Xxxxxx. After receipt
of such lump sum payment, upon the request of a majority of the
Board of Directors, Xx. Xxxxxx shall resign as a director and
officer of the Company and of any of its subsidiaries.
(iii) "Cause" shall mean any act or acts by Xx. Xxxxxx of dishonesty or
fraud or that constitute serious moral turpitude; misconduct of a
material nature or a material breach in connection with the
performance by him of his responsibilities hereunder; or the
failure by Xx. Xxxxxx for a substantial period to devote adequate
time to rendering the
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services provided for hereunder (other than by reason of his
death or permanent disability.)
(iv) Upon a determination that because of a permanent disability, Xx.
Xxxxxx is no longer able to carry out his duties and
responsibilities hereunder, in which event the Company shall
give notice of such termination to Xx. Xxxxxx and shall
thereafter continue to pay him his salary at the rate then in
effect for a period of three (3) full calendar months.
(v) Upon the death of Xx. Xxxxxx, in which event the Company shall
pay to his legal representative so much of Xx. Xxxxxx' salary as
was accrued, but not paid at the date of his death.
(b) Termination By Xx. Xxxxxx.
(i) Xx. Xxxxxx may resign his employment on sixty (60) days' prior
written notice to the Company, in which event the Company shall
continue to pay him his salary at the rate then in effect for
such sixty-day period; provided however, that in the event that
Xx. Xxxxxx gives notice of his resignation within sixty (60)
days after a Change in Control of the Company (as defined
below), the Company shall pay Xx. Xxxxxx the amount provided for
under Section 9(a)(ii), above, as if his employment had been
terminated by the Company without Cause on the date Xx. Xxxxxx
gave the Company notice of his resignation.
(ii) For purposes of this Section 9(b), a "Change in Control of the
Company" shall mean the acquisition by a person, an entity or a
group of persons or entities of 20% or more of the Company's
voting securities (other than as a result of the exercise by
stockholders of rights under the Company's Shareholders Rights
Plan).
(iii) The Company may deem any such notice given by Xx. Xxxxxx as a
resignation by him, effective upon the giving of such notice, of
the Chairmanship of the Board of Directors and of any one or
more of the offices then held by him in the Company and its
subsidiaries.
10. CONFIDENTIAL INFORMATION.
(a) So long as Xx. Xxxxxx is an employee and/or director of the Company
and after any or all of such relationships terminate for whatever
reason, Xx. Xxxxxx shall (i) not disclose to any person or entity
Confidential Information (as defined below) except in the proper
performance of his duties and responsibilities or except as may be
expressly authorized by the Board of Directors of the Company; and
(ii) shall not use Confidential Information for his own benefit or
for the benefit of any person or entity other than the Company and
its subsidiaries.
(b) For purposes of this Agreement, "Confidential Information" is defined
as including trade secrets, customer names and lists, vendor names
and lists, business plans, marketing plans, non-public financial
data, product specifications and designs, the existence, nature,
substance, progress and results of research and development projects,
concepts, inventions, discoveries, formulae, processes, drawings,
documents, records, software, or any other information of the
Company, its parent or of any of their subsidiaries that is not
generally available, or any such information of any third party that
is held by the Company, its parent or any of their subsidiaries under
an obligation of confidentiality. Without limiting the
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generality of the foregoing, it is understood and agreed that the
intellectual property, plans, methods and techniques of the Company
or that were disclosed to the Company by a third party that relate to
the realization of the benefits of net loss operating carryforwards
are included within the term Confidential Information.
(c) Xx. Xxxxxx'x obligation of confidentiality shall not, however, relate
to any information --
(i) that is or becomes generally or widely known through no act or
fault of Xx. Xxxxxx;
(ii) that is received by Xx. Xxxxxx (without a breach of this or any
other agreement) from a third party with no restrictions as to
its disclosure; or
(iii) that is required to be disclosed pursuant to applicable law, a
court order or a judicial proceeding, including a proceeding to
enforce this Agreement.
11. NON-COMPETE OBLIGATIONS.
(a) In consideration of the Company's agreement to pay the 30% Bonus as
provided herein, Xx. Xxxxxx'x obligations with respect to competing
with the Company and soliciting its employees shall be as follows:
(i) Xx. Xxxxxx shall not render services or advice, whether for
compensation or without compensation and whether as an
employee, officer, director, consultant, principal or
otherwise, to any person or organization --
(1) that is competitive with the Company's current aftermarket
automobile parts and supplies distribution business or
with any planned business of the Company as to which Xx.
Xxxxxx was involved in the planning within a radius of 200
miles of any facility of the Company; or
(2) that is competitive with the consulting services of the
Company relating to certain methods and techniques for the
realization of the benefits of net operating tax loss
carryforwards within the United States.
(ii) Xx. Xxxxxx shall not either directly or indirectly as agent or
otherwise in any manner solicit, influence or encourage any
customer, client or associate of the Company to take away or to
divert or direct its business to Xx. Xxxxxx or to any person or
entity by or with which Xx. Xxxxxx is employed, associated,
affiliated or otherwise related (other than the Company).
(iii) Xx. Xxxxxx shall not recruit or otherwise solicit or induce any
person to terminate his or her employment or other relationship
with the Company.
(b) Xx. Xxxxxx'x obligations under Section 11(a) shall continue so long
as he is an employee of the Company. Such obligations also shall
continue for the following periods after his employment terminates
for whatever reason: with respect to his obligations described in
Section 11(a)(i)(1) and Sections 11(a)(ii) and (iii), above, for a
period of one (1) year; and with respect to his obligations under
Section 11(a)(i)(2), above, for a period of three (3) years.
(c) For purposes of this Section 11, the word "Company" shall include the
Company and any subsidiary of the Company.
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12. OUTSTANDING STOCK OPTION AGREEMENTS. Each outstanding stock option
agreement between Xx. Xxxxxx and the Company is hereby amended so that from
and after the date hereof any references in such option agreements to the
Consulting Agreement shall, from and after the date hereof, constitute
references to this Agreement.
13. PRORATION. To the extent that Xx. Xxxxxx' salary at the rate in effect from
time to time needs to be prorated for a period of less than a full month,
such salary shall be deemed earned on a daily basis and shall be pro rated
based on a 365-day year.
14. NOTICES. All notices required or permitted under this Agreement shall be in
writing and shall be deemed given to a party either (a) when hand delivered
to such party; (b) when deposited with a courier service with instructions
to provide next-business-day delivery and proof of delivery to such party;
or (c) when sent by facsimile transmission to such party as follows:
If to the Company, at: Oakhurst Company, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
with a copy other
than by facsimile to Xxxx X. Lever, Esq.
Xxxxxxx & Xxxxxxxxx
Xxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
If to Xx. Xxxxxx at: Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
with a copy other
than by facsimile to Bryanston Management Limited
00 Xxxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
or to such other address of a party as that party shall notify the other
party in the manner provided herein.
15. ENTIRE AGREEMENT ETC.
(a) This Agreement contains the entire understanding of the parties;
supersedes the Consulting Agreement in its entirety from and after the
date hereof; shall not be amended except by written agreement of the
parties signed by each of them; and shall be binding upon and inure to
the benefit of the parties and their successors, personal
representatives and permitted assigns. Because the obligations of Xx.
Xxxxxx are personal, this Agreement shall not be assignable by him.
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(b) Each provision of this Agreement shall be interpreted and enforced
without the aid of any canon, custom or rule of law requiring or
suggestion construction against the party drafting or causing the
drafting of such provision.
(c) No representation, affirmation of fact, course of prior dealings,
promise or condition in connection herewith or usage of the trade not
expressly incorporated herein shall be binding on the parties.
(d) The words "herein," "hereof," "hereunder," "hereby," "herewith" and
words of similar import when used in this Agreement shall be construed
to refer to this Agreement as a whole.
(e) The failure by a party to insist upon strict compliance with any term,
covenant or condition, or to exercise any right, contained herein
shall not be deemed a waiver of such term, covenant, condition or
right; and no waiver or relinquishment of any term, covenant,
condition or right at any one or more times shall be deemed a waiver
or relinquishment thereof at any other time or times.
(f) The captions of the paragraphs herein are for convenience only and
shall not be used to construe or interpret this Agreement.
16. SEVERABILITY. If any provision or part of a provision of this Agreement is
finally declared to be invalid by any tribunal of competent jurisdiction,
such part shall be deemed automatically adjusted, if possible, to conform
to the requirements for validity, but, if such adjustment is not possible,
it shall be deemed deleted from this Agreement as though it had never been
included herein. In either case, the balance of any such provision and of
this Agreement shall remain in full force and effect. Notwithstanding the
foregoing, however, no provision shall be severed if it is clearly apparent
under the circumstances that either or both of the parties would not have
entered into this Agreement without such provision.
17. SURVIVAL. The termination of Xx. Xxxxxx' employment and/or this Agreement
shall not relieve Xx. Xxxxxx of his obligations under Section 10
("Confidential Information") or Section 11 ("Non-Compete Obligations")
hereof. In addition, any other obligations of the parties that by their
terms are to be performed or are to have continued effect after the
termination of Xx. Xxxxxx' employment or of this Agreement (such as the
provisions for payment of the 30% Bonus) shall survive such expiration or
termination.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or of any other jurisdiction) that would cause the
application hereto of the laws of any jurisdiction other than the State of
Delaware.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first set forth above.
OAKHURST COMPANY, INC.
By: /s/ Xxxx X. Lever /s/ Xxxxxx X. Xxxxxx
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Xxxx X. Lever XXXXXX X. XXXXXX
For the Board of Directors
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