EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Agreement, effective as of April 28, 1997 ("Effective Date"), is
by and between Corporate Express, Inc. (the "Company"), a Colorado corporation,
and Xxxx Xxxxxxx ("Employee").
WHEREAS, the Company wishes to employ Employee and Employee desires to
accept such employment under the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the parties agree as follows:
1. Employment. The Company shall employ Employee as President North
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American Operations, and Employee hereby accepts such employment and agrees to
perform such duties and undertake such responsibilities as are customarily
performed by others holding positions similar to that assigned to Employee in
similar businesses, subject to the general and customary supervision of the
Company's President and Chief Operating Officer.
2. Full-Time Best Efforts. Employee shall devote his full and
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exclusive professional time and attention to the performance of his obligations
under this Agreement, and will at all times faithfully, industriously and to the
best of his ability, experience and talent, perform all of his obligations
hereunder. Notwithstanding the foregoing, the Company acknowledges that
Employee may serve as an outside director of one company during the term of his
employment, so long as such company is pre-approved by the President or CEO of
the Company. Employee currently serves as a director of APS Holdings, Inc.
("APS") and the Company agrees that Employee may continue to serve in such
capacity.
3. Term of Employment. Employee's term of employment shall continue
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uninterrupted from the date of this Agreement until April 28, 2001. The term of
this Agreement may be extended for one or more additional one year terms
following the expiration of the initial term upon mutual agreement of the
parties.
4. Compensation. Commencing April 28, 1997 and continuing during the
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term of this Agreement, the Company shall pay Employee an annual base salary of
not less than $260,000 payable at the usual times for the payment of the
Company's salaried employees, subject to adjustment as provided herein.
Employee's base salary shall be reviewed at least annually and may be increased,
but not decreased without Employee's consent, consistent with general salary
increases for the Company's executive employees or as appropriate in light of
the performance of Employee and the Company. Employee will be eligible for an
annual bonus plan that will pay amounts based partially on the Company's
earnings per share as compared to a plan approved by the Company's Board of
Directors ("Plan") and partially on objectives negotiated with the President or
CEO ("Objectives"). If Plan is achieved and the Objectives are obtained,
Employee will receive a bonus equal to 50% of Employee's then-current base
salary. If Plan is exceeded subject to targets established annually by the
Board of Directors and the Objectives are exceeded, the bonus can increase to up
to 100% of Employee's then-current base salary.
5. Benefits and Incentive Compensation.
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(a) Employee shall be entitled to receive all benefits (such as
medical, dental, disability and life insurance, paid vacation, and retirement
plan coverage) as are generally available from time to time to senior executives
of the Company. Employee shall be eligible to participate in any bonus,
incentive compensation, stock option, performance unit or similar plans or
programs as the Company may maintain for compensating senior executives at such
level of participation as the Company's Board of Directors may determine in its
reasonable discretion based upon Employees's responsibilities and performance.
(b) Promptly after approval of this Agreement by the Board of
Directors of the Company and after the Effective Date of this Agreement, the
Compensation Committee will grant Employee options to purchase 450,000 shares of
common stock of the Company at the then current market price per share on the
date of grant, which options will vest over 4 years in equal annual installments
(25% per year), with the first installment vesting on the date that Employee and
his family relocate their residence to the Denver area (the "Relocation Date"),
or April 28, 1998, whichever occurs later. In addition, the Board will grant to
Employee options to purchase 300,000 shares of common stock on similar terms and
conditions as the performance vesting options granted at or about the same time
to other executive officers.
6. Signing Bonus and Relocation Expenses.
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Upon approval of this Agreement by the Board of Directors, and on
or immediately after the Effective Date of this Agreement, Employee shall
receive a $100,000 signing bonus. So long as Employee relocates to Colorado by
June 30, 1998, the Company will pay Employee an additional $100,000 which may be
applied towards relocation expenses. The Company shall have no further
responsibility to reimburse Employee for relocation costs. In addition, during
the period between the Effective Date and the Relocation Date (but no later than
June 30, 1998), the Company will reimburse Employee for the rent (up to $2,000
per month) paid by Employee for a furnished apartment, and reimburse Employee
for travel costs related to three trips each month to his residence in Houston,
Texas. Employee will provide adequate documentation for all items to be
reimbursed by the Company.
7. Termination.
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(a) The Company may terminate this Agreement at any time for Cause
effective immediately upon written notice to Employee. Such notice shall
specify that a termination is being made for Cause and shall state the basis
therefor. In such event, Employee shall accrue no additional rights or benefits
pursuant to the terms of this Agreement from the date of such termination. For
purposes of this Agreement, termination for "Cause" shall be defined as
termination because of:
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(i) The willful and continued failure by Employee to
substantially perform or the gross negligence in the performance of his duties
hereunder for a period of fifteen days after the President or CEO had made a
written demand for performance which specifically identifies the manner in which
the Board of Directors believes that Employee has not substantially performed
his duties.
(ii) The commission by Employee of a willful act of dishonesty
or misconduct which is demonstrably injurious to the Company.
(iii) A conviction or a plea of guilty or nolo contendere in
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connection with fraud or any crime that constitutes a felony in the jurisdiction
involved.
(iv) The commission by Employee of repeated acts of alcohol
abuse which are demonstrably injurious to the Company or the knowing use of any
illegal substances.
A termination for Cause must be made, if at all, within sixty days
after the Company learns of the latest such event which entitles the Company to
terminate Employee's employment hereunder.
(b) Employee may terminate this Agreement upon fifteen days' prior
written notice to the Company if the Company has breached any material term or
condition of this Agreement without the express previous consent of Employee,
and such breach is not cured within the fifteen day period following receipt of
written notice of such breach by the Board of Directors of the Company.
Employee's notice shall specify the manner in which Employee believes that the
Company has breached this Agreement. A breach of this Agreement shall include a
change of Employee's position within the Company if the new position is not a
comparable position. A position shall be deemed to be "comparable" if it is for
the performance of similar duties, at an equal or greater rate of compensation,
at a location within fifty miles of Employee's work location, all as determined
at the time of the change in position.
(c) This Agreement shall terminate immediately upon the death of
Employee or if Employee is unable to perform his duties hereunder by reason of
illness, injury or incapacity for ninety consecutive days (during which time
Employee shall continue to be compensated as provided herein). In either such
event, Employee or his personal representative, beneficiaries or heirs shall be
entitled to receive any benefits provided under any benefit or similar plan or
policy adopted by the Company and applicable to Employee, but Employee shall
accrue no additional rights or benefits pursuant to the terms of this Agreement
from the date of such termination.
8. Termination Benefits. If Employee's employment shall be
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terminated by the Company while this Agreement is in effect for any reason other
than for Cause or upon the death or disability of Employee, or if Employee
voluntarily terminates employment following a
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breach of this Agreement by the Company which is not cured within the requisite
period, then the Company shall pay Employee a termination benefit as follows:
(a) The Company shall pay up to an amount equal to Employee's
monthly base salary, using the rate of base salary in effect immediately prior
to Employee's termination of employment, times twelve. Payments shall (i)
commence upon termination, (ii) be made at the same rate using the same payment
schedule as in effect immediately prior to such termination and (iii) terminate
upon the earlier to occur of (a) the date Employee commences paid employment or,
(b) until the termination benefit set forth in the preceding sentence has been
paid in full. Employee will also receive his "Earned Bonus" at such time as
bonuses are paid to other employees of the Company. "Earned Bonus" shall be
calculated based upon the number of full months during the then current bonus
period that Employee was employed by the Company divided by the number of months
in said bonus period.
(b) The Company shall continue to provide medical, dental and life
insurance coverage to Employee at the same levels of coverage as in effect
immediately prior to such date for twelve months.
(c) One-fourth of any unvested stock options granted to Employee
will immediately vest and shall be exercisable as provided in the stock option
agreement evidencing such grant.
(d) Notwithstanding anything in this Section 7 to the contrary, no
less than 60 days after the date of a termination causing payment of termination
benefits, the Company shall calculate the amount of any "parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"). If the Company determines that any part of the
termination benefit provided pursuant to this Section 7 would not be deductible
due to the provision of Section 280G of the Code, the termination benefit shall
be reduced to the extent, but only to the extent necessary so that the amount of
the termination benefit provided pursuant to this Section 7 will be deductible
by the Company. The reduction shall be made in the last payment to be made to
Employee hereunder and then, if necessary to the prior payments in reverse
chronological order.
9. Confidentiality and Non-Competition.
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(a) During the course of his employment, Employee will be working
with and will have unlimited access to the most sensitive confidential
information and trade secrets of the Company and its subsidiaries (each a
"Subsidiary"). Employee shall not, while employed by the Company or any
Subsidiary, or at any time thereafter, without the prior written consent of the
Company (i) disclose any trade secrets or confidential information of the
Company or any Subsidiary (including but not limited to pricing information,
customer lists, supply information, internal business procedures, management
information systems and techniques, market studies, expansion plans and similar
non-public information relating to the internal operations, business policies or
practices of the Company or any Subsidiary) to any third party, or (ii) use or
permit
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the use of any such trade secrets or confidential information in any way to
compete (directly or indirectly) with the Company or any Subsidiary or in any
other manner adverse to the Company or any Subsidiary. Upon request from the
Company, Employee shall promptly return all records, notes, data, memoranda and
other information and documents, and copies thereof, which contain or may
contain any such trade secrets and/or confidential information, and shall
confirm in writing to the Company that all such materials have been returned.
(b) Employee shall not, while employed by the Company or any
Subsidiary or for a period of three years following the termination of
Employee's employment (i) own any interest in, accept employment with, serve as
an advisor, consultant, officer, director, agent or in any similar capacity to,
or accept compensation (in any form) from, any person, firm or entity (including
any new business started by Employee - alone or with others) engaged in any
Competitive Business (as hereinafter defined), (ii) contact or solicit any
individual or entity that was a customer of the Company or any Subsidiary during
the period of Employee's employment for the purpose of diverting any existing
or future business of such customers to a competing source or (iii) contact or
solicit any employees of the Company (directly or indirectly) for the purpose of
causing, inviting or encouraging any such employee to alter or terminate his or
her employment relationship with the Company. Notwithstanding anything herein
to the contrary, Employee shall be entitled to own as a passive investor no more
than 1% of the capital stock of a company required to make public disclosure
filings pursuant to the Securities Exchange Act of 1934 without being in
violation of this paragraph (b).
(c) For purposes of this paragraph, a "Competitive Business" means
the sale of office products, furnishings, desktop software, equipment and/or
related services, provided, however, that a business shall not be deemed to be a
Competitive Business unless at least 10% of the gross revenues of such business
are derived from the sale of office products, furnishings, desktop software,
equipment and/or related services. For purposes of the foregoing 10% test, the
gross revenues of the business shall be determined at the subsidiary, divisional
or similar level according to the organizational structure of the entity in
question.
(d) If any court shall determine that the duration or geographical
scope of any restriction contained in this Section 8 is unenforceable, it is the
intention of the parties that the provisions set forth herein shall not be
terminated but shall be deemed restricted, amended, and/or reformed to the
extent necessary to render it valid and enforceable, provided that such
restriction, amendment and/or reformation shall only be applicable to the
enforcement of the provisions hereof within the jurisdiction of the court which
made such determination.
(e) Employee acknowledges and agrees that the provisions of this
Section 8 are a reasonable and necessary protection of the immediate and
substantial interests of the Company and its Subsidiaries, that any violation of
these restrictions would cause substantial injury to the Company and/or its
Subsidiaries, and that the Company would not have entered into this Agreement
with Employee without the additional consideration offered by Employee in
binding himself to the provisions of this Section 8. In the event of a breach
or threatened breach
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by Employee of any provision of this Section 8, the Company shall be entitled to
apply to any court of competent jurisdiction for a temporary and/or permanent
injunction restraining Employee from such breach or threatened breach; provided,
however, that nothing herein contained shall be construed to preclude the
Company from pursuing any other available remedy for such breach or threatened
breach in addition to, or in lieu of, such injunctive relief.
10. Outside Directorship and Officership. Employee will resign from
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all of his director and officer positions (other than the one outside director
position with APS) before April 28, 1997 so as of April 28, 1997 Employee will
hold no such position (except for with APS) in any company not affiliated with
the Company.
11. Inventions and Patents. Employee agrees that all reasonably
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patentable inventions, innovations or improvements in the Company's products or
method of conducting its business (including new contributions, improvements,
ideas and discoveries, whether patentable or not) conceived or made by him while
he is employed by the Company belong to the Company, but may be used by Employee
at any time without compensation to the Company (unless the covenant not to
compete set forth in Section 8 hereof is in force). Employee will promptly
disclose such inventions, innovations or improvements to the officers of the
Company.
12. Arbitration. In the event of any dispute between Employee and
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the Company under or related to the terms of this Agreement, the parties hereto
agree to submit such dispute to final and binding arbitration in Denver,
Colorado pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. The decision of the arbitrator shall be final and
binding on both parties, provided, however, that in arriving at a decision, the
arbitrator shall find in favor of one party or the other, and shall not in
rendering his decision fashion a compromise or otherwise order an outcome
different than that proposed by one of the parties. Such arbitration
proceedings shall be completed not later than 90 days following submission,
except and only to the extent that such delay is attributable to the unavoidable
delay of the arbitrator. The prevailing party in such arbitration shall be
entitled to recover all reasonable costs incurred in connection therewith,
including reasonable attorney's fees.
13. Miscellaneous.
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(a) For purposes of this Agreement, notices and other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered in person or by first class United States
mail, postage prepaid. Notices to the Company shall be given to the Company's
Secretary and Chairman of the Board, addressed to the Company's corporate
headquarters. Notices to Employee shall be addressed to Employee's most recent
address as set forth in the personnel records of the Company. Notices shall be
effective upon receipt. Either party shall be entitled to change the address at
which notice is to be given by providing notice to the other party of such
change in the manner provided herein.
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(b) This Agreement sets forth the entire agreement of the parties
with respect to the subject matter hereof, and supersedes all prior agreements,
whether written or oral. This Agreement may be amended only by a writing signed
by both parties hereto.
(c) This Agreement shall be binding upon, and inure to the
benefit of the parties, their respective heirs, successors, personal
representatives and assigns.
(d) No waiver of any provision of this Agreement shall be valid
until it is in writing and signed by the person or party against whom it is
charged.
(e) The invalidity or unenforceability of any provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable provision were omitted.
(f) This Agreement shall be subject to and governed by the laws
of the State of Colorado.
(g) This Agreement is subject to approval by the Company's Board
of Directors (the "Board") after the results of a reference and background check
of Employee's history. Unless otherwise extended by the written consent of the
Company, if this Agreement is not approved by the Board prior to March 1, 1997,
the Company may terminate this Agreement without penalty or expense by giving
written notice of such termination to Employee. In the event the Board approves
this Agreement subject to specified changes or modifications, Employee may
either consent to such changes or terminate this Agreement by written notice of
such termination to the Company, which must be received within 7 days of Board
approval. No termination by reason of the failure to obtain Board approval or
the refusal of Employee to consent to changes required by the Board as a
condition of such approval shall entitle Employee to receive the termination
benefits set forth in paragraph 7 hereof.
CORPORATE EXPRESS, INC.
By: Xxxxxx Xxxx
_________________________________
Title:
_______________________________
EMPLOYEE
Xxxx Xxxxxxx
____________________________________
S:\LEGAL\EMPLOYME\XXXXXXX.
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