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EXHIBIT 99(c)(4)
EMPLOYMENT AND NONCOMPETE AGREEMENT
THIS EMPLOYMENT AND NONCOMPETE AGREEMENT ("Agreement"), made and
entered into as of the _____ day of January, 1997, by and between XXXXX X.
XXXXX, an individual resident of Lake Xxxxx, South Carolina ("Xxxxx"), and PCA
INTERNATIONAL, INC., a North Carolina corporation with its principal executive
offices located in Matthews, North Carolina (the "Company").
IN CONSIDERATION of the promises and the mutual covenants contained
herein, the parties hereto agree as follows:
1. Employment. Subject to the terms and conditions stated herein,
and in consideration of Xxxxx' obligations and covenants, including without
limitation, those obligations and covenants set forth in Section 5 hereof, the
Company agrees to employ Xxxxx, and Xxxxx accepts such employment, as a Special
Advisor to the President and CEO, subject to the order, supervision and
direction of the Chief Executive Officer of the Company (the "CEO").
2. Duties. Xxxxx shall serve the Company as Special Advisor and
shall devote to the business of the Company in the performance of his duties as
Special Advisor his best efforts and such time as may be reasonably requested by
the CEO.
In no event, during the Term of Employment, shall Xxxxx be required to
report other than to the President and CEO of the Company. The President and
CEO shall deal with Xxxxx in good faith and shall not require that he relocate
his residence, require unreasonable travel, or require him to perform tasks
which would be demeaning or degrading to one in his position.
As Special Advisor, Xxxxx shall perform such duties as the President
and CEO may prescribe.
3. Term of Employment. The term of Xxxxx' employment by the
Company hereunder shall commence as of the date hereof and shall continue for a
period of four (4) months after such commencement date (the "Term of
Employment").
4. Compensation. The base monthly compensation rate to be paid
to Xxxxx for the services to be rendered hereunder ("Monthly Base Rate")
throughout the Term of Employment shall be Thirteen
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Thousand Seven Hundred Fifty and No/100 Dollars ($13,750.00), payable in
accordance with the Company's normal payroll practices, subject to applicable
federal and state income and social security tax withholding requirements. In
the event any of the monthly payments due hereunder shall become more than
three (3) months past due, Employee shall have the option to accelerate the
remaining payments due hereunder so that they shall be due and payable in full.
5. Noncompetition, Secrecy and Inventions.
(a) Xxxxx specifically acknowledges and agrees that his
employment with the Company will bring him in personal contact with accounts and
customers of the Company, and will enable him to acquire valuable information as
to the nature and character of the business of the Company and the requirements
of the accounts and customers of the Company. Xxxxx acknowledges and agrees
that in the event he were to become employed by some other employer or enter the
same or similar business as the Company on his own or in conjunction with others
in competition with the Company, such personal contacts with the customers and
accounts of the Company and the knowledge of such valuable information would
give to Xxxxx an unfair competitive advantage.
Throughout the Term of Employment and for a period of five (5) years
and eight (8) months thereafter (Xxxxx' Term of Employment and the period
thereafter, together, the "Term of the Covenants"), Xxxxx shall not, directly
or indirectly, as principal, agent, manager, employee, partner, shareholder,
director, officer, consultant or otherwise, participate in or engage in the
Lines of Business, as hereinafter defined; provided, however, that Xxxxx may
own up to one percent (1%) of the outstanding securities of any corporation
which is engaged in the Lines of Business (except the Company) so long as such
securities are traded on a national securities exchange or are included in the
National Association of Securities Dealers Quotation System. "Lines of
Business" for purposes of this Section 5 shall mean the provision of portrait
photography services through itinerant or traveling operations or permanent
studios or any other portrait photography service, the processing or developing
of photographic film in connection with such provision and any other lines of
business in which the Company may engage during the Term of Employment.
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(b) In performing the covenants set forth in this Section
5 (all of the covenants of Xxxxx set forth in this Section 5, together, the
"Covenants Not to Compete"), Xxxxx shall not, without limitation, during the
Term of the Covenants engage in the Lines of Business with any of the
following:
1. any client, account or customer of the Company, or
any subsidiary or affiliate of the Company, that has
done business with the Company or such affiliate or
subsidiary within two (2) years of the date of any
alleged competitive act by Employee;
2. any client, account or customer of the Company, or
any subsidiary or any affiliate of the Company, that
has transacted any business with the Company within
the twelve months preceding the date of this
Agreement;
3. Wal-Mart Stores, Inc. or any subsidiary thereof
("Wal-Mart");
4. any affiliate of Wal-Mart, including without
limitation Sam's Wholesale Club, HYPERMART*USA and
Wal-Mart SuperCenters (a "Wal-Mart Affiliate");
5. KMart Corporation or any subsidiary thereof ("KMart");
6. any affiliate of KMart, including without limitation
KMart SuperCenters (a "KMart Affiliate");
7. PETsMART, Inc. or any subsidiary thereof ("PETsMART");
8. any affiliate of PETsMART (a "PETsMART Affiliate");
9. any current or prospective institutional customer
("Institutional Customer");
10. CPI Corp.;
11. Lifetouch National School Studios, Inc.;
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12. any Wal-Mart store that does business with the
Company during the Term of the Covenants;
13. any Wal-Mart Affiliate store that does business with
the Company during the Term of the Covenants;
14. any Wal-Mart store with which the Company previously
conducted business but no longer conducts business or
the Board of Directors reasonably expects to do
business during the Term of the Covenants;
15. any Wal-Mart Affiliate store with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
16. any PETsMART store that does business with the
Company during the Term of the Covenants;
17. any PETsMART Affiliate store that does business with
the Company during the Term of the Covenants;
18. any PETsMART store with which the Company previously
conducted business but no longer conducts business or
the Board of Directors reasonably expects to do
business during the Term of the Covenants;
19. any PETsMART Affiliate store with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
20. any Institutional Customer with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
21. any KMart store that does business with the Company
during the Term of the Covenants;
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22. any KMart store that does business with the Company
during the Term of the Covenants;
23. any KMart store with which the Company previously
conducted business but no longer conducts business or
the Board of Directors reasonably expects to do
business during the Term of the Covenants;
24. any KMart Affiliate store with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
25. Xxxxx, X.X. de C.V.;
26. Aurrera, S.A. de C.V., a subsidiary of Xxxxx, X.X. de
C.V.;
27. any other subsidiary of Xxxxx, X.X. de C.V.;
28. Xxxx Xxxxx;
29. Expressly Portraits;
30. any employee or former employee of the Company, whose
employment with the Company terminated less than two
(2) years prior to Employee's association with such
employee or former employee, within a ten-mile radius
of any Wal-Mart store or any store in which the
Company has engaged in the Lines of Business within
six (6) months prior to Employee's engaging in the
Lines of Business; or
31. any person or entity in the geographic areas listed
in paragraph 10(c) hereinbelow.
(c) In performing the Covenants Not to Compete, Xxxxx
shall not, without limitation, during the Term of the Covenants engage in the
Lines of Business in any of the following geographic areas:
1. The United States of America;
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2. The State of Alabama;
3. The State of Arizona;
4. The State of Arkansas;
5. The State of California;
6. The State of Colorado;
7. The State of Connecticut;
8. The State of Delaware;
9. The District of Columbia;
10. The State of Florida;
11. The State of Georgia;
12. The State of Idaho
13. The State of Illinois;
14. The State of Indiana;
15. The State of Iowa;
16. The State of Kansas;
17. The State of Kentucky;
18. The State of Louisiana;
19. The State of Maine;
20. The State of Maryland;
21. The State of Massachusetts;
22. The State of Michigan;
23. The State of Minnesota;
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24. The State of Mississippi;
25. The State of Missouri;
26. The State of Montana
27. The State of Nebraska;
28. The State of Nevada
29. The State of New Hampshire;
30. The State of New Jersey;
31. The State of New Mexico
32. The State of New York;
33. The State of North Carolina;
34. The State of North Dakota;
35. The State of Ohio;
36. The State of Oklahoma;
37. The State of Oregon;
38. The State of Pennsylvania;
39. The Commonwealth of Puerto Rico;
40. The State of Rhode Island;
41. The State of South Carolina;
42. The State of South Dakota;
43. The State of Tennessee;
44. The State of Texas;
45. The State of Utah
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46. The State of Vermont;
47. The State of Virginia;
48. The State of Washington;
49. The State of West Virginia;
50. The State of Wisconsin;
51. The State of Wyoming;
52. Mexico;
53. Canada;
54. Puerto Rico;
55. South America;
56. Latin America;
57. Asia;
58. China; and
59. Counties in each State of the United States where the
Company has customers.
(d) As applied to the categories of persons, firms and
entities and geographic areas covered by the Covenants Not to Compete, the
provisions of paragraphs 5(b) and 5(c), respectively, shall be completely
severable and independent, and any invalidity or unenforceability thereof as
applied to any of such persons, firms or entities or geographic areas shall not
affect the validity or enforceability thereof as applied to any one or more of
the other persons, firms or entities or geographic areas.
(e) Throughout the Term of the Covenants, Xxxxx shall not
directly or indirectly cause or attempt to cause any supplier or customer of
the Company, or any of its subsidiaries or affiliates, or any governmental body
or public agency, not to do business with the Company or such subsidiary or
affiliate or to transfer all or part of its business from the Company, or
such
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subsidiary or affiliate, or otherwise interfere or attempt to interfere with
any business relationship between the Company, or any of its subsidiaries or
affiliates, and any of such suppliers, customers, government bodies or public
agencies, unless directed by the Board of Directors of the Company to so do.
(f) Xxxxx acknowledges that irreparable injury will
result to the Company from any breach of the Covenants Not to Compete and there
is no adequate remedy at law to redress a breach or threatened breach of the
Covenants Not to Compete As a result of the foregoing, Xxxxx agrees that the
parties seeking to enforce any of such provisions shall be entitled to an
injunction or other equitable relief against Xxxxx to restrain him from such
breach, and Xxxxx waives any claim or defense that the Company has an adequate
remedy at law for any such breach; provided, however, that nothing contained
herein shall prohibit the Company, or any subsidiary or affiliate of the
Company, from pursuing any other remedy it may have, including without limiting
the generality of the foregoing the recovery of damages.
(g) If any court determines that any provision of this
Section 5, or any part thereof, is invalid or unenforceable, the remainder of
this Section 5 shall not thereby be affected and shall be given full effect,
without regard to the invalid portions. If any court determines that any
provision of this Section 5, or any part thereof, is unenforceable because of
the duration or geographic scope of such provision, the parties agree that such
court shall have the power to reduce the duration or scope of such provision,
as the case may be, and the parties agree to request the court to exercise such
power, and, in its reduced form, such provision shall then be enforceable and
shall be enforced. The provisions of this Section 5 shall survive the
termination of this Agreement, for whatever reason.
(h) At all times, both during and after the termination
of his employment, Xxxxx shall keep and retain in confidence and shall not,
without the prior written consent of the Company, disclose to any persons, firm
or corporation or otherwise use for his own benefit or the benefit of another
any of the proprietary, confidential or secret information or trade secrets of
the Company. Further, Xxxxx and the Company agree to keep confidential the
terms and conditions of this Agreement except for such disclosure as may be
required (i) in the event of a breach of this Agreement, (ii)
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compulsion by law or court order, or (iii) as may be required by any applicable
provision of law.
(i) In consideration of employment, and the compensation
paid to Xxxxx as an employee of the Company, Xxxxx hereby recognizes as the
exclusive property of, and assigns, transfers and conveys to, the Company
without further consideration each invention, discovery or improvement
(hereinafter collectively refer@ed to as "inventions") made, conceived,
developed or first reduced to practice by Xxxxx (whether alone or jointly with
others) during the Term of Employment or within one (1) year thereafter which
relates in any way to Xxxxx' work at the Company or any of its subsidiaries or
affiliates. Employee will communicate to the Company current written records
of all such inventions, which records shall be and remain the property of the
Company. Upon request by the Company, Xxxxx will at any time execute documents
assigning to the Company, or its designees, any such invention or any patent
application or patent granted therefor, and will execute any papers relating
thereto. Xxxxx also will give all reasonable assistance to the Company, or its
designee, regarding any litigation or controversy in connection with his
inventions, patent applications, or patents, all expenses incident thereto to
be assumed by the Company.
(j) As additional consideration payable hereunder and specifically
as payment for the Covenants Not to Compete, the Company shall pay to Xxxxx the
Monthly Base Amount beginning at the end of the Term of Employment throughout
the Term of the Covenants. Such payments shall be made monthly in arrears. In
the event any of the monthly payments due hereunder shall become more than
three (3) months past due, Employee shall have the option to accelerate the
remaining payments due hereunder so that they shall be due and payable in full.
(k) Notwithstanding anything herein to the contrary, any
participation in or engagement in the Lines of Business by Interactive
Solutions, Inc., a North Carolina corporation, or any successor thereto, or by
Xxxxx Xxxxxxx, a resident of North Carolina, shall be a breech of this Section
5 by Employee.
6. Governing Law. This Agreement shall be construed and governed
under the laws of the State of North Carolina.
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7. Binding Nature. Except as expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and assigns. The obligations and
covenants of Xxxxx are personal in nature and, as such, are not assignable by
him.
8. Entire Agreement; Prior Oral Agreement; Amendment. This
Agreement contains the entire agreement of the parties with respect to the
matters set forth herein and supersedes all prior written and prior or
contemporaneous oral agreements or understandings of the parties hereto. This
Agreement confirms and sets forth the prior oral agreement of the parties as to
the terms and conditions of Xxxxx' employment by the Company stated herein,
including without limitation, the obligations and covenants of Xxxxx set forth
in Section 5 hereof, and Xxxxx' agreement to enter into a written employment
agreement with the Company, as of the date his employment by the Company
commenced, stating such terms and conditions. This Agreement may be changed or
amended only by an agreement in writing signed by both parties hereto.
9. Severability, Invalidity or Unenforceability. The
severability, invalidity or unenforceability of any paragraph or part of any
paragraph herein shall not in any way affect the validity or enforceability of
any other paragraph or any part of any other paragraph.
10. Prior Agreements and Covenants of Xxxxx. Xxxxx hereby
warrants and represents that he is not a party to any agreement or binding
obligation, oral or written, that would prevent his employment by the Company,
and Xxxxx' execution of this Agreement and his fulfillment of his duties and
obligations hereunder do not and will not violate the provisions of any
agreement, contract, loan document or other binding written or oral obligation.
11. Notices. Any notice, offer, acceptance or other document
required or permitted to be given pursuant to any provisions of this Agreement
shall be in writing, signed by or on behalf of the person giving the same, and
(as elected by the person giving such notice) delivered by hand or mailed to
the parties at the following addresses by registered or certified mail, postage
prepaid, return receipt requested, or by a third party company or governmental
entity providing delivery services in the ordinary course of business, which
guarantees delivery on a specified date:
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If to Xxxxx: Xxxxx X. Xxxxx
____________________
____________________
If to the Company: PCA International, Inc.
000 Xxxxxxxx-Xxxx Xxxx Xxxx Xxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
With copies to: Xxxxxx X. Xxxxxx
XXXXXXXX, XXXXXXXX & XXXXXX, P.A. One
Independence Center 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000 (000) 000-0000
or to such other address as any party hereto may designate by complying with
the provisions of this Section 15.
Such notice shall be deemed given (i) as of the date of written
acknowledgment by Xxxxx or an officer of the Company if delivered by hand, (ii)
seventy-two (72) hours after deposit in United States mail if sent by
registered or certified mail or (iii) on the delivery date guaranteed by the
third party delivery service if sent by such service.
Rejection or other refusal to accept or inability to deliver because
of changed address of which no notice has been received shall not affect the
date upon which the notice is deemed to have been given pursuant hereto.
Notwithstanding the foregoing, no notice of change of address shall be
effective until the date of receipt hereof.
16. Stock Option Grant. Xxxxx will be granted an option to
purchase 100,000 shares of the Company's common stock on the date hereof,
having an exercise price equal to 100% of the closing price at which a share of
Common Stock trades on the date of the grant's Effective Date, all as defined
in the PCA International, Inc. 1996 Omnibus Long-Term Compensation Plan (the
"Plan"). Such option shall be treated as a nonqualified stock option for
federal income tax purposes. Such option shall terminate on a date that is
five (5) years following the date of grant and shall not terminate for any
reason prior to such date, including without limitation, the
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termination of Xxxxx' employment hereunder. Upon the death of Xxxxx within
such 5 year period, the options granted hereunder will be transferred to his
estate or as directed in his will. Such options shall be exercisable in full
on the grant's Effective Date.
IN WITNESS WHEREOF, Xxxxx X. Xxxxx has set his hand and seal hereto
and PCA International, Inc. has caused this Agreement to be executed and sealed
in its name by its duly authorized officials as of the day and year first above
written.
XXXXX:
______________________________(SEAL)
XXXXX X. XXXXX
COMPANY:
PCA INTERNATIONAL, INC.
By:
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Xxxx Xxxxxx
President and CEO
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