EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into this 30th
day of May, 1996, by and between MIAMI COMPUTER SUPPLY, INC. (the "Company") and
THOMAS C. WINSTEL (the "Executive").
WITNESSETH:
WHEREAS, the Company desires to employ the Executive and the Executive
desires to be employed by the Company;
NOW, THEREFORE, upon the terms and conditions hereinafter set forth, it is
hereby agreed between the parties as follows:
I. DUTIES
A. Upon the terms and subject to the conditions of this Agreement, the
Company hereby employs the Executive as Vice President of the Company, and the
Executive hereby accepts said employment.
B. The Executive's employment with the Company shall be full time provided,
however, that he shall not be restricted from the pursuit of other business
interests, hobbies, or interests which neither compete nor interfere with his
duties on behalf of the Company.
C. The Executive's areas of responsibility shall be as directed by the
Board of Directors and the President of the Company, and may include certain
aspects of the Company's business, including but not limited to, the sale of
computer supplies to various "key accounts" located in the Dayton, Ohio
metropolitan area, management of the Presentation Products Division, to include
both sales and operations and any other duties specified by the Board of
Directors. The Executive shall, from time to time and as requested, report to
the Board of Directors with respect to his activities. The Executive agrees to
exercise his duties and responsibilities hereunder in good faith, with
reasonable diligence, and in accordance with sound business practice.
D. The Executive shall devote his full business time and efforts and all
reasonable energy and skill to the business of the Company and shall use his
best efforts to promote the interest thereof. The Executive's services shall be
rendered with due regard for the prompt, efficient and economical operation of
the business of the Company.
E. Except for occasional business trips which may be necessary or desirable
in connection with the performance of the Executive's duties, the Executive
shall not be required, without his consent, which shall not be unreasonably
withheld, to perform any duties at any location outside of a one hundred (100)
mile radius from Dayton, Ohio.
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II. TERMS AND CONDITIONS OF EMPLOYMENT
A. This Agreement shall commence on the date hereof and shall terminate on
the earliest to occur of:
1. December 31, 1999;
2. The death of the Executive; or
3. On written notice of termination from the Company to the Executive,
which notice may be given only on or after there shall have elapsed a
consecutive period of 90 days, (or a non-consecutive period of 120 days during
any twelve month period) during which the Executive was physically or mentally
incapacitated and unable to perform his duties hereunder.
B. In addition to the events described in the foregoing Section II.A., the
Company shall be entitled to terminate this Agreement upon written notice to the
Executive:
1. For cause, which for purposes of this Agreement shall mean the
refusal to perform, or the substantial neglect of, or an intentional failure to
perform, a material portion of the Executive's duties and obligations on behalf
of the Company, which actions or inactions are not reasonably cured within ten
(10) days after receipt of written notice from the Company with respect thereto;
willful misconduct; breach of a fiduciary duty involving personal gain; any
material breach of this Agreement; or
2. If the Executive has been convicted of a felony or a crime
involving moral turpitude, theft, fraud, embezzlement, intentional or reckless
conversion or destruction of Company funds or assets.
C. The Executive shall have the right to terminate this Agreement upon
reasonable notice to Company:
1. For cause, which for purposes of this Agreement shall mean the
failure of the Company to provide resources which are necessary to the
fulfillment of the Executive's responsibilities, and which failure(s) are not
reasonably cured within ten (10) days after receipt of written notice hereof
from the Executive;
2. Upon the express direction of the Board of Directors to perform any
action or inaction which, in the reasonable opinion of the Executive and upon
written advice of his counsel is illegal;
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3. Upon the threatened or actual insolvency or receivership of the
Company not caused by any action or inaction of the Executive; or
4. Upon the failure of the Company to perform its obligations to
Executive as set forth in this Agreement.
D. Termination in accordance with any of the foregoing provisions of
Sections II.A., B. or C. above shall be effective on the date applicable to the
particular termination section referred to above (the "Termination Date"), and
from and after such date, this Agreement shall be of no further force and
effect; provided, however, that no such termination shall affect a party's
rights to seek damages or other relief in respect of a breach by the other party
of his or its obligations under this Agreement and, no such termination shall
affect the Company's rights under Sections IV. and V., herein, or the
Executive's rights under Section III. hereof with respect to any compensation
accrued or stock vested through such date of termination. For purposes of this
Agreement and as used anywhere herein, the phrase "fully and finally terminated
for cause" or "fully and finally terminate" shall mean the later of thirty (30)
days from the date of receipt of written notice of termination from one party to
the other, or the date of a final decision as a result of the Alternative
Dispute Resolution ("ADR") format set forth in Section IX. of this Agreement.
III. BASE SALARY
A. Executive shall be paid a base salary of $3,000.00 per month ("Base
Salary") plus a commission in the amount of 40% of the Gross Margin of computer
supply sales to current assigned "key accounts" as set forth on the list
attached hereto as Exhibit A. (Gross Margin is defined herein to mean the
difference between the unit sales invoice price and the actual dollar cost of
the product to the Company.) Executive's monthly compensation shall also include
a commission of 5% of the Gross Margin on sales of all products in the
Presentation Products Division.
B. Executive will be furnished an automobile (up to $35,000, 1996 value)
and insurance, repairs, gas, oil, fees, etc., and such other per diem
allowances, as approved by the Board of Directors, equaling no more than $1,200
per month for his use for Company business. The Company shall also pay for
Executive's annual medical examination in an amount not to exceed $900 per year
and for a Social Membership for "Country Club of the North" which will require
an initiation fee of approximately $5,000 and an annual membership fee of $900.
C. Executive will be able to take up to six (6) weeks vacation per year.
D. During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option,
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employee stock ownership, or other plans, benefits and privileges given to
employees and executives of the Company, to the extent commensurate with his
then duties and responsibilities, as fixed by the Board of Directors of the
Company. The Company shall not make any changes in such plans, benefits or
privileges which would adversely affect Executive's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Company and does not result in a proportionately
greater adverse change in the rights of or benefits to Executive as compared
with any other executive officer of the Company. Nothing paid to Executive under
any plan or arrangement presently in effect or made available in the future
shall be deemed to be in lieu of the Base Salary payable to Executive pursuant
to Section III.A. hereof.
E. In addition to the foregoing, the Executive shall at all times during
the period of the Executive's employment under this Agreement be eligible to
participate in and to be covered by all plans, if any, effective generally with
respect to executives of the Company with respect to life insurance, accident
insurance, health insurance, hospitalization, disability, and other benefits of
whatsoever kind or description, to the extent the Executive is eligible under
the terms of such plans, on the same basis as other executives of the Company
and without restriction or limitation by reason of this Agreement. The Executive
shall be entitled to all of the fringe benefits and perquisites of office of
whatsoever kind or description made available generally to other executives of
the Company, including, but not limited to, customary paid holidays, without
restriction or limitation by reason of any specific benefit provided for in this
Agreement.
F. The Company shall pay or reimburse the Executive for all reasonable
out-of-pocket expenses incurred or paid by him in connection with the
performance of his duties under this Agreement, upon presentation of expense
statements or vouchers or such other supporting information as the Company may
reasonably require.
IV. VALUATION OF SHARES UPON TERMINATION
A. If Executive is terminated for cause prior to December 31, 1999, and
provided that Company's shares are not publicly traded on the Termination Date,
then Company, at its sole option exercised by written notice to Executive thirty
(30) or more days from the date of Executive's full and final termination, shall
be entitled to mandate that Executive's entire equity interest in the Company be
redeemed. The value of the Executive's equity interest in the Company shall be
not less than 70% of the per share purchase price as set forth in the Stock
Purchase Agreement by and among Pittsburgh Investment Group LLC, the Company,
the Executive and other former stockholders of the Company dated April 25, 1996,
as amended. In the event that Executive and Company cannot agree upon the value
of Executive's redeemable equity interest, then such issue shall be resolved
pursuant to ADR as set forth in Section IX. of this Agreement. All monies due
and owing pursuant to this Section IV.A. to Executive shall be
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fully paid within thirty (30) days of the date of the ADR decision or of the
date set forth in a written agreement of the parties whichever shall first
occur.
B. If Executive terminates this Agreement for cause or is himself fully and
finally terminated for cause prior to December 31, 1999, and the Company's
shares are publicly traded, then and in such event, Executive shall not be
restricted hereby in the disposition of his entire equity interest in the
Company, subject to applicable federal and state securities laws.
C. If Executive terminates this Agreement for cause prior to December 31,
1999, and provided that the Company's shares are not publicly traded, then
Executive, at his option exercised by written notice to the Company within
thirty (30) days from the date of full and final termination, shall be entitled
to have his entire interest in the Company redeemed. In the event that Executive
and Company cannot agree upon the value of Executive's redeemable interest, then
such issue shall be resolved pursuant to ADR as set forth in Section IX. of this
Agreement. All monies due and owing to Executive shall be fully paid within
thirty (30) days of the date of the ADR decision or of the date set forth in a
written agreement of the parties whichever shall first occur.
D. In the event that this Agreement is terminated as a result of
Executive's death, and in the further event that the Company's shares shall not
be publicly traded at such time, then the value of the deceased's interest in
the Company shall be established by agreement between the Company and authorized
representatives of Executive's estate. In the event that no such agreement can
be reached, the parties shall submit the unresolved issues to ADR pursuant to
Section IX. of this Agreement.
E. In the event Executive is permanently disabled (as defined by standard
disability insurance policies) and is unable to reasonably perform the aggregate
of his assigned responsibilities and this Agreement is terminated as a result
thereof, and in the further event that the Company's shares shall not be
publicly traded at such time, then the Company, at its sole option exercised by
written notice within thirty (30) days after the Date of Termination, may
require the redemption of Executive's equity interest in the Company. In the
event that the Company and Executive (or his legally appointed representatives)
cannot agree on the value of Executive's equity interest, then such issue shall
be resolved pursuant to ADR as set forth in Section I.X. of this Agreement. All
monies due and owing to Executive shall be fully paid within thirty (30) days of
the date of the ADR decision or of the date set forth in a written agreement of
the parties whichever shall first occur.
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V. NON-COMPETITION
A. 1. The Company has disclosed to Executive its confidential business
plans, marketing strategies, advertising copy, funding sources, wholesale and
retail customer lists, equipment sources, financial projections and results and
other information in the course of Executive's occupation as a Vice President of
the Company. This information and similar information yet to be developed by the
Executive is generally unknown to the pubic and gives the Company a competitive
advantage over those who do not have access to this information. The Company has
taken and will take care to protect this information from becoming generally
known. The Company has revealed this information to the Executive on the
condition that he keep it confidential and will require confidentiality from the
Executive and all other persons with access to the information in the future.
The information described above, therefore, constitutes valuable trade secrets
of the Company and is referred to below as "Proprietary Information." In the
course of performing his duties under this Agreement, the Executive will both
help develop and be privy to Proprietary Information.
2. The Company has and shall retain all exclusive rights in the Proprietary
Information. During the term of this Agreement and any extension hereof and for
so long after its termination or expiration as permitted by law, Executive shall
not disclose Proprietary Information to any third party or make any commercial
or academic use of the Proprietary Information without the express written
consent of the Company, which consent may be withheld for any or no reason in
the Company's sole discretion.
3. These restrictions on the use and disclosure of Proprietary Information
shall survive the expiration or termination of this Agreement, regardless of the
grounds or lack of grounds therefor. The parties recognize and agree that, in
the event of a threatened or actual breach of this Section V.A., the Company's
remedy at law will be inadequate to fully compensate the Company for its losses.
Therefore, the Company may enforce its rights hereunder by equitable remedies,
including without limiting the generality of the foregoing, injunctive relief
and specific performance.
B.1. During the term of this Agreement and for twelve (12) months after the
Termination Date, Executive hereby covenants and agrees that the Executive (and
any person or entity controlled by, under common control with or controlling the
Executive) will not sell or distribute or be financially or otherwise associated
with anyone that sells or distributes computer supplies in an area within a one
hundred (100) mile radius of any existing office of the Company. For purposes of
this Section V.B.1., "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
person or entity, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the activities, affairs, management or
policies of such person or entity, whether through personal relationship, the
ownership of voting securities or by contract or otherwise.
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Page 7
2. The Executive agrees that in the event that the Executive commits a
breach or threatens to commit a breach of any of the provisions of this Section
V.B., the Company shall have the right and remedy to have the provisions of this
Section V.B. specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
immediate irreparable injury to the Company and that money damages will not
provide an adequate remedy at law for any such breach or threatened breach. Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company at law or in equity.
3. If any of the provisions of or covenants contained in this Section V.B.
are hereafter construed to be invalid or unenforceable in any jurisdiction, the
same shall not affect the remainder of the provisions or the enforceability
thereof in any other jurisdiction, which shall be given full effect, without
regard to the invalid portions or the unenforceability in such other
jurisdiction because of the duration or geographic scope thereof, the parties
agree that the court making such determination shall have the power to reduce
the duration and/or geographic scope of such provision or covenants and, in its
reduced form, said provision or covenant shall be enforceable; provided,
however, that the determination of such court shall not affect the
unenforceability of this Section V.B. in any other jurisdiction.
VI. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement as to the subject matter
hereof and there are not terms other than those contained herein. No variation
hereof or amendment hereto shall be deemed to be a valid unless in writing and
signed by the parties hereto. No waiver by either party of any provision or
condition of this Agreement by him or it to be performed shall be deemed to be a
waiver of similar or dissimilar provisions or conditions at the same or any
prior or subsequent time.
VII. BINDING EFFECT
This Agreement shall inure to the benefit of and be binding upon the
Company, its successors and assigns, and the Executive, his heirs, executors,
administrators and legal representatives.
VIII. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio. However, all disputes between the parties shall be
resolved by ADR in the jurisdiction wherein the Executive is domiciled.
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Page 8
IX. ALTERNATIVE DISPUTE RESOLUTION
A. The parties agree that it is in their best interests to resolve all
disputes or controversies arising out of this Agreement in a cost effective and
timely manner. Therefore, all such unresolved disputes or controversies shall be
determined through a format of ADR, to be mutually agreed upon between the
parties. All ADR determinations shall be final and binding upon the parties
unless otherwise agreed in writing.
B. In the event that the parties are unable to agree on an ADR format,
dispute resolution shall take place through the American Arbitration Association
or, if agreed, another mutually acceptable ADR organization.
X. INDEMNIFICATIONS; WITHHOLDING
A. The Company shall fully indemnify and hold harmless Executive from any
and all claims, demands, judgments, liens, subrogation, or costs incurred by
Executive with respect to any shareholder derivative action or other claims or
suits against Company and/or its Board of Director by individuals, firms, or
entities not a party to this Agreement to the extent permitted by the Company's
Articles of Incorporation, Bylaws and applicable corporate law.
B. The Company shall provide Executive with a policy of insurance during
the term of Executive's employment which covers errors and omissions of the
Executive while in the course and scope of his employment with the Company or
its affiliates or divisions, if such policy is obtainable and the premium
therefore is commercially reasonable, in the sole discretion of the Board of
Directors.
C. All payments required to be made by the Company hereunder to the
Executive shall be subject to the withholding of such amounts, if any, relating
to tax and other payroll deductions as the Company may reasonably determine
should be withheld pursuant to any applicable law or regulation.
XI. NOTICES
A. Any notices or other communication required or permitted hereunder shall
be sufficiently given if sent by registered mail or certified mail, postage
prepaid, addressed, if to the Executive, to him at 368 Lincoln Circle,
Beavercreek, Ohio 45385, and if to the Company, to it at 3884 Indian Ripple
Road, Dayton, Ohio 45440, Attention: President.
B. For purposes of all notices to be given pursuant to or arising out of
this Agreement including a demand for ADR, a party will be presumed to have
received written notice on the date of the actual receipt thereof.
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IN WITNESS WHEREOF, the Company and the Executive have set their hands on
the date above written.
ATTEST:
/s/ Rochelle T. Hayes By: /s/ Thomas C. Winstel
- --------------------- ----------------------
Thomas C. Winstel
"Executive"
MIAMI COMPUTER SUPPLY, INC.
ATTEST:
/s/ Rochelle T. Hayes By: /s/ Al Schwarz
- --------------------- ---------------
Name: Albert L. Schwarz
Title: President
"Company"
EXHIBIT A
WINSTEL "KEY ACCOUNTS"
Employment Agreement - Miami Computer Supply Inc. and Thomas C. Winstel
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