EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 24th day of January, 1997, is by
and between Professional Travel Corporation, a Colorado corporation (the
'Company') and a wholly-owned subsidiary of U.S. Office Products Company
('USOP'), a Delaware corporation, and Edward S. Adams ('Employee').
RECITALS
The Company desires to continue to employ Employee and to have the benefit
of his skills and services, and Employee desires to continue employment with the
Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. EMPLOYMENT; TERM. The Company hereby employs Employee to perform the
duties described herein, and Employee hereby accepts employment with the
Company, for a term beginning on the date hereof and continuing for a period of
two years. The term of this Agreement shall be extended automatically beyond the
initial two-year period for one additional, successive one-year term, unless the
Company notifies Employee no less than 60 days prior to the end of the initial
period that it does not intend to extend the term for an additional period at
the end of the then-effective term. The initial period, together with any
renewal periods shall be referred to in this Agreement as the 'Term.'
2. POSITION AND DUTIES. The Company hereby employs Employee as President
of the Company. In addition, Employee will serve as President of the
Professional Travel Division of USOP. As such, Employee shall have
responsibilities, duties and authority reasonably accorded to and expected of
the President of the Company. Employee will report directly to the Board of
Directors of the Company (the 'Board'). Employee hereby accepts this employment
upon the terms and conditions herein contained and agrees to devote all of his
professional time, attention, and efforts to promote and further the business of
the Company. Employee shall faithfully adhere to, execute, and fulfill all
policies established by the Company.
3. COMPENSATION. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) BASE SALARY. Effective on the date hereof, the base salary payable to
Employee shall be $250,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures, but not less than monthly. On at
least an annual basis, the Board will review Employee's performance and may make
increases to such base salary if, in its sole discretion, any such increase is
warranted.
(b) INCENTIVE BONUS. During the Term, Employee shall be eligible to
receive an incentive bonus, up to the amount, based upon the criteria, and
payable at such times as are, specified in Exhibit A attached hereto. The
amount, manner of payment, and form of consideration, if any, shall be
determined by the Board of Directors of the Company, in its sole and absolute
discretion, and such determination shall be final and binding. To the extent
that such bonus is to be determined in light of financial performance during a
specified fiscal period and this Agreement commences on a date after the start
of such fiscal period, any bonus payable in respect of such fiscal period's
results may be prorated. In addition, if the period of Employee's employment
hereunder expires before the end of a fiscal period, and if Employee is eligible
to receive a bonus at such time (such eligibility being subject to the
restrictions set forth in Section 6 below), any bonus payable in respect of such
fiscal period's results may be prorated.
(c) PERQUISITES, BENEFITS, AND OTHER COMPENSATION. During the Term,
Employee shall be entitled to receive all perquisites and benefits as are
customarily provided by the Company to its employees, subject to such changes,
additions, or deletions as the Company may make generally from time to time, as
well as such other perquisites or benefits as may be specified from time to time
by the Board. In addition, the Company shall pay for or reimburse Employee for
expenses incurred by Employee in connection with his use of one automobile in
connection with his employment hereunder, said expenses not to exceed $712 per
month.
4. EXPENSE REIMBURSEMENT. The Company shall reimburse Employee for (or, at
the Company's option, pay) all business travel and other out-of-pocket expenses
reasonably incurred by Employee in the performance of his services hereunder
during the Term. All reimbursable expenses shall be appropriately documented in
reasonable detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense reporting
policy, as well as applicable federal and state tax record keeping requirements.
5. PLACE OF PERFORMANCE. Employee understands that he may be requested by
the Company to relocate from his present residence to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement or as part of a promotion or a change in duties and
responsibilities. In such event, if Employee agrees to relocate, the Company
will provide Employee with a relocation allowance, in an amount determined by
the Company, to assist Employee in covering the costs of moving himself, his
immediate family, and their personal property and effects. The total amount and
type of costs to be covered shall be determined by the Company, in light of
prevailing Company policy at the time. Notwithstanding the foregoing, if the
Company requests Employee to relocate, and Employee refuses, such refusal shall
not constitute 'cause' for termination of the Agreement. If Employee is
terminated for such refusal, Employee shall be entitled to receive his base
salary at the rate then in effect for the shorter of (i) six months from the
effective date of termination or, (ii) whatever time period is remaining under
the then-current period of the Term (with regard to renewals thereof).
6. TERMINATION: RIGHTS ON TERMINATION. Employee's employment may be
terminated in any one of the followings ways, prior to the expiration of the
Term:
(a) DEATH. The death of Employee shall immediately terminate the Term, and
no severance compensation shall be owed to Employee's estate.
(b) DISABILITY. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been unable to perform the material
duties of his position on a full-time basis for a period of four consecutive
months, or for a total of four months in any six-month period, then 30 days
after written notice to Employee (which notice may be given before or after the
end of the aforementioned periods, but which shall not be effective earlier than
the last day of the applicable period), the Company may terminate Employee's
employment hereunder (subject to the last sentence of this Section 6(b)) if
Employee is unable to resume his full-time duties at the conclusion of such
notice period. Subject to Section 6(f) below, if Employee's employment is
terminated as a result of Employee's disability, the Company shall continue to
pay Employee his base salary at the then-current rate for the lesser of (i) six
months from the effective date of termination, or (ii) whatever time period is
remaining under the then-current period of the Term (without regard to renewals
thereof). Such payments shall be made in accordance with the Company's regular
payroll cycle. If Employee has been unable to perform the material duties of his
position on a full-time basis for a period of four consecutive months, or for a
total of four months in any six-month period, but Employee is able to perform
the material duties of his position on a part-time basis, the Company agrees to
negotiate with Employee in good faith an alternative employment arrangement
taking into account Employee's inability to perform his position on a full-time
basis. If the Company and Employee are able to agree on a new employment
arrangement in the event of Employee's disability, Employee shall continue to be
eligible to receive the option component of the incentive compensation set forth
in the first paragraph of Exhibit A attached hereto.
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(c) TERMINATION BY THE COMPANY 'FOR CAUSE.' The Company may terminate the
Term 10 days after written notice to Employee 'for cause,' which shall be: (i)
Employee's material breach of this Agreement, which breach is not cured within
10 days of receipt by Employee of written notice from the Company specifying the
breach; (ii) Employee's gross negligence in the performance of his duties
hereunder, intentional nonperformance or mis-performance of such duties, or
refusal to abide by or comply with the lawful directives of the Board, his
superior officers, or the Company's policies and procedures, which actions
continue for a period of at least 10 days after receipt by Employee of written
notice of the need to cure or cease; (iii) Employee's willful dishonesty, fraud,
or gross misconduct with respect to the business or affairs of the Company or
USOP, and that in the judgment of the Company or USOP materially and adversely
affects the operations or reputation of the Company of USOP; (iv) Employee's
conviction of a felony or other crime involving moral turpitude; or (v)
Employee's abuse of alcohol or drugs (legal or illegal) that, in the Company's
judgment, materially impairs Employee's ability to perform his duties hereunder.
In the event of a termination 'for cause,' as enumerated above, Employee shall
have no right to any severance compensation.
(d) WITHOUT CAUSE. At any time after the commencement of employment, the
Company may, without cause, terminate the Term and Employee's employment,
effective 30 days after written notice is provided to Employee. Should Employee
be terminated by the Company without cause, subject to Section 6(f) below,
Employee shall receive from the Company without cause, subject to Section 6(f)
below, Employee shall receive from the Company the base salary at the rate then
in effect for the longer of (i) six months from the date of termination, or (ii)
whatever time period is remaining under the then-current period of the Term
(without regard to renewals thereof). In addition, should Employee be terminated
by the Company without cause or due to his refusal to relocate as described in
Section 5 above, all unearned options for USOP stock granted to Employee as
incentive compensation pursuant to this Agreement (as more fully set forth in
Exhibit A hereto) shall be awarded immediately and shall be deemed to be fully
vested and exercisable upon grant and all previously earned but unvested options
shall also vest immediately. Such payments shall be made in accordance with the
Company's regular payroll cycle. If Employee resigns or otherwise terminates his
employment for any reason or for no reason, Employee shall receive no severance
compensation.
(e) PAYMENT THROUGH TERMINATION. Upon termination of Employee's employment
for any reason provided above, Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements (including payments for
accrued vacation and sick leave, in each case in accordance with applicable
policies of the Company) due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to Employee only to the extent and in the manner expressly provided
above in this Section 6. With respect to incentive bonus compensation, Employee
shall be entitled to receive any bonus declared but not paid prior to
termination. In addition, in the event of a termination by the Company under
Section 6(b) or 6(d), Employee shall be entitled to receive incentive bonus
compensation through the end of the Company's fiscal year in which termination
occurs, calculated as if Employee had remained employed by the Company through
the end of such fiscal year, and paid in such amounts, at such times, and in
such forms as are determined pursuant to Section 3(b) above and Exhibit A
attached hereto. Except as specified in the preceding two sentences, Employee
shall not be entitled to receive any incentive bonus compensation after the
effective date of termination of this employment. All other rights and
obligations of USOP, the Company, and Employee under this Agreement shall cease
as of the effective date of termination, except that the Company's obligations
under Section 11 below and Employee's obligations under Sections 7, 8, 9 and 10
below shall survive such termination in accordance with their terms.
(f) RIGHT TO OFFSET. In the event of any termination of Employee's
employment under this Agreement, Employee shall have no obligation to seek other
employment; PROVIDED, that in the event that Employee secures employment or any
consulting or other similar arrangement during the period that any payment is
continuing pursuant to the provisions of this Section 6, the Company shall have
the right to
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reduce the amounts to be paid hereunder by the amount of Employee's earnings
from such other employment.
7. RESTRICTION ON COMPETITION
(a) During the Term, and thereafter, if Employee continues to be employed by
the Company and/or any other entity owned by or affiliated with the Company or
USOP on an 'at will' basis, for the duration of such period, and thereafter for
a period equal to the longer of (x) two years, or (y) the period during which
Employee is receiving any severance pay from the Company, Employee shall not,
directly or indirectly, for himself or on behalf of or in conjunction with any
other person, company, partnership, corporation, business, group, or other
entity (each, a 'Person'):
(i) engage, as an officer, director, shareholder, owner, partner, joint
venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant, advisor, or sales representative, in any business
selling any products or services in direct competition with the Company or
USOP, within 100 miles of any location where the Company or USOP conducts
business (the 'Territory');
(ii) call upon any Person who is, at that time, within the Territory, an
employee of the Company or USOP for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company or
USOP;
(iii) call upon any Person who or that is, at that time, or has been,
within one year prior to that time, a customer of the Company or USOP within
the Territory for the purpose of soliciting or selling products or services
in direct competition with the Company or USOP within the Territory; or
(iv) on Employee's own behalf or on behalf of any competitor, call upon
any Person who or that, during Employee's employment by the Company or USOP
was either called upon by the Company or USOP as prospective acquisition
candidate or was the subject of an acquisition analysis conducted by the
Company or USOP.
(b) The foregoing covenants shall not be deemed to prohibit Employee from
acquiring as an investment not more than two percent of the capital stock of a
competing business, whose stock is traded on a national securities exchange or
through the automated quotation system of a registered securities association.
(c) It is further agreed that, in the event that Employee shall cease to be
employed by the Company or USOP and enters into a business or pursues other
activities that, at such time, are not in competition with the Company or USOP,
Employee shall not be chargeable with a violation of this Section 7 if the
Company or USOP subsequently enters the same (or a similar) competitive business
or activity or commences competitive operations within 100 miles of Employee's
new business or activities. In addition, if Employee has no actual knowledge
that his actions violate the terms of this Section 7, Employee shall not be
deemed to have breached the restrictive covenants contained herein if, promptly
after being notified by the Company or USOP of such breach, Employee ceases the
prohibited actions.
(d) For purposes of this Section 7, references to 'USOP' shall mean U.S.
Office Products Company, together with its subsidiaries and affiliates.
(e) The covenants in this Section 7 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. If any provision of this Section 7 relating to the time period
or geographic area of the restrictive covenants shall be declared by a court of
competent jurisdiction to exceed the maximum time period or geographic area, as
applicable, that such court deems reasonable and enforceable, said time period
or geographic area shall be deemed to be, and thereafter shall become, the
maximum time period or largest geographic area that such court deems reasonable
and enforceable and this Agreement shall automatically be considered to have
been amended and revised to reflect such determination.
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(f) All of the covenants in this Section 7 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company or
USOP, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by USOP or the Company of such covenants; PROVIDED,
that upon the failure of the Company to make any payments required under this
Agreement, Employee may, upon 30 days' prior written notice to the Company,
waive his right to receive any additional compensation pursuant to this
Agreement and engage in any activity prohibited by the covenants of this Section
7. It is specifically agreed that the period of two years stated at the
beginning of this Section 7, during which the agreements and covenants of
Employee made in this Section 7 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this Section 7.
(g) If the time period specified by this Section 7 shall be reduced by law
or court decision, then, notwithstanding the provisions of Section 6 above,
Employee shall be entitled to receive from the Company his base salary at the
rate then in effect solely for the longer of (i) the time period during which
the provisions of this Section 7 shall be enforceable under the provisions of
such applicable law, or (ii) the time period during which Employee is not
engaging in any competitive activity, but in no event longer than the applicable
period provided in Section 6 above. If Employee is subject to a restriction on
competitive activity as a party to that certain Agreement and Plan of
Reorganization, dated as of January 24, 1997, by and among USOP, the Company,
Professional Travel Acquisition Corp. and Employee (the 'Merger Agreement'),
then Employee shall abide by, and in all cases be subject to, the restrictive
covenants (whether in this Section 7 or in the Merger Agreement) that, in the
aggregate, impose restrictions on Employee for the longest duration and the
broadest geographic scope (taking into account the effect of any applicable
court decisions limiting the scope or duration of such restrictions), it being
agreed that all such restrictive covenants are supported by separate and
distinct consideration. This Section 7(g) shall be construed and interpreted in
light of the duration of the applicable restrictive covenants.
(h) Employee has carefully read and considered the provisions of this
Section 7 and, having done so, agrees that the restrictive covenants in this
Section 7 impose a fair and reasonable restraint on Employee and are reasonably
required to protect the interests of the Company and USOP, and their respective
officers, directors, employees, and stockholders. It is further agreed that the
Company and Employee intend that such covenants be construed and enforced in
accordance with the changing activities, business, and locations of the Company
and USOP throughout the term of these covenants.
8. CONFIDENTIAL INFORMATION. Employee hereby agrees to hold in strict
confidence and not to disclose to any third party any of the valuable,
confidential, and proprietary business, financial, technical, economic, sales,
and/or other types of proprietary business information relating to the Company
and/or USOP (including all trade secrets), in whatever form, whether oral,
written, or electronic (collectively, the 'Confidential Information'), to which
Employee has, or is given (or has had or been given), access as a result of his
employment by the Company. It is agreed that the Confidential Information is
confidential and proprietary to the Company and/or USOP because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales, or other valuable aspects of the
Company's and USOP's business and trade, including, without limitation,
technologies, products, processes, plans, clients, personnel, operations, and
business activities. This restriction shall not apply to any Confidential
Information that (a) becomes known generally to the public through no fault of
Employee; (b) is required by applicable law, legal process, or any order or
mandate of a court or other governmental authority to be disclosed; or (c) is
reasonably believed by Employee, based upon the advice of legal counsel, to be
required to be disclosed in defense of a lawsuit or other legal or
administrative action brought against Employee; PROVIDED, that in the case of
clauses (b) or (c), Employee shall give the Company reasonable advance written
notice of the Confidential Information intended to be disclosed and the reasons
and circumstances surrounding such disclosure, in order to permit the Company to
seek a protective order or other appropriate request for confidential treatment
of the applicable Confidential Information.
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9. INVENTIONS. Employee shall disclose promptly to the Company and USOP
any and all significant conceptions and ideas for inventions, improvements, and
valuable discoveries, whether patentable or not, that are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one year thereafter, and that are directly related to the business or
activities of the Company or USOP and that Employee conceives as a result of his
employment by the Company, regardless of whether or not such ideas, inventions,
or improvements qualify as 'works for hire.' Employee hereby assigns and agrees
to assign all his interests therein to the Company or its nominee. Whenever
requested to do so by the Company, Employee shall execute any and all
applications, assignments, or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
10. RETURN OF COMPANY PROPERTY. Promptly upon termination of Employee's
employment by the Company for any reason or no reason, Employee or Employee's
personal representative shall return to the Company (a) all Confidential
Information; (b) all other records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, correspondence, reports, records, charts,
advertising materials, and other data or property delivered to or compiled by
Employee by or on behalf of the Company, USOP or their respective
representatives, vendors, or customers that pertain to the business of the
Company or USOP, whether in paper, electronic, or other form; and (c) all keys,
credit cards, vehicles, and other property of the Company or USOP. Employee
shall not retain or cause to be retained any copies of the foregoing. Employee
hereby agrees that all of the foregoing shall be and remain the property of the
Company or USOP, as the case may be, and be subject at all times to their
discretion and control.
11. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee, his employment by the
Company, and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other Person.
Further, Employee agrees to indemnify and hold harmless the Company and its
officers, directors, and representatives for any claim, including, but not
limited to, reasonable attorney's fees and expenses of investigation, of any
such third party that such third party may now have or may hereafter come to
have against the Company or such other persons, based upon or arising out of any
non-competition agreement, invention, secrecy, or other agreement between
Employee and such third party that was in existence as of the date of this
Agreement. To the extent that Employee had any oral or written employment
agreement or understanding with the Company, this Agreement shall automatically
supersede such agreement or understanding, and upon execution of this Agreement
by Employee and the Company, such prior agreement or understanding automatically
shall be deemed to have been terminated and shall be null and void.
12. ASSIGNMENT: BINDING EFFECT. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience, and skills. Employee agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement. This
Agreement may not be assigned or transferred by the Company without the prior
written consent of Employee. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Notwithstanding the foregoing, if Employee accepts
employment with a subsidiary or affiliate of USOP other than the Company, unless
Employee and his new employer agree otherwise in writing, this Agreement shall
automatically be deemed to have been assigned to such new employer (which shall
thereafter be an additional or substitute beneficiary of the covenants contained
herein, as appropriate), with the consent of Employee, such assignment shall be
considered a condition of employment by such new employer, and references to the
'Company' in this Agreement shall be deemed to refer to such new employer. If
the Company is merged with or into another subsidiary or affiliate of USOP, such
action shall not be considered to cause an assignment of this Agreement, and the
surviving or successor entity shall become the beneficiary of this Agreement and
all references to the 'Company' shall be deemed to
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refer to such surviving or successor entity. It is intended that USOP will be a
third-party beneficiary of the rights of the Company under this Agreement. No
other Person shall be a third-party beneficiary.
13. COMPLETE AGREEMENT: WAIVER; AMENDMENT. This Agreement is not a promise
of future employment. Employee has no oral representations, understandings, or
agreements with the Company or any of its officers, directors, or
representatives covering the same subject matter as this Agreement. This
Agreement together with the Merger Agreement, is the final, complete, and
exclusive statement and expression of the agreement between the Company and
Employee with respect to the subject matter hereof and thereof, and cannot be
varied, contradicted, or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by a writing signed by the party waiving the benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: Professional Travel Corporation
84 Inverness Circle East
Englewood, Colorado 80155
Attention: President
with a copy to: U.S. Office Products Company
1025 Thomas Jefferson St., N.W.,
Suite 600E
Washington, D.C. 20007
Attn: Mark D. Director, Esq.
To Employee: Edward S. Adams
5401 South Race Court
Greenwood Village, Colorado 80121
Notice shall be deemed given and effective three days after the deposit in the
U.S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or, if sent by express delivery, hand delivery, or
facsimile, when actually received. Either party may change the address for
notice by notifying the other party of such change in accordance with this
Section 15.
16. SEVERABILITY: HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 7(e) above. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
17. EQUITABLE REMEDY. Because of the difficulty of measuring economic
losses to the Company and/ or USOP as a result of a breach of the restrictive
covenants set forth in Sections 7, 8, 9 and 10, and because of the immediate and
irreparable damage that would be caused to the Company and/or USOP for which
monetary damages would not be a sufficient remedy, it is hereby agreed that in
addition to all other remedies that may be available to the Company or USOP at
law or in equity, the Company and USOP shall be entitled to specific performance
and any injunctive or other equitable relief as a remedy for any breach or
threatened breach of the aforementioned restrictive covenants.
18. ARBITRATION. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to, detract
from, or modify any provision thereof nor to award punitive damages to any
injured party. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the
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arbitrators' award in any court having jurisdiction. The direct expense of any
arbitration proceeding shall be borne by the Company. Each party shall bear its
own counsel fees. The arbitration proceeding shall be held in the city where the
Company is located. Notwithstanding the foregoing, the Company and/or USOP shall
be entitled to seek injunctive or other equitable relief, as contemplated by
Section 17 above, from any court of competent jurisdiction, without the need to
resort to arbitration.
19. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of Colorado, without regard to its conflict of laws
principles.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
PROFESSIONAL TRAVEL CORPORATION
By: /s/ ROBERT C. GRIFFITH
------------------------------------------
Robert C. Griffith, CPA
VICE PRESIDENT,
FINANCE & ADMINISTRATION
EMPLOYEE: /s/ EDWARD S. ADAMS
Edward S. Adams
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EXHIBIT A
Employee shall be eligible to receive options to purchase up to a total of
400,000 shares of USOP Common Stock, to be awarded under USOP's 1994 Amended and
Restated Long-Term Incentive Plan. The options shall be earned in increments of
40,000 shares, for each $10 million of additional commission revenue added to
USOP's Professional Travel Division after the Closing (as defined in the Merger
Agreement), using the Company's December 31, 1996 revenue (equal to $19,571,500)
as a benchmark. The exercise price of the options shall be the closing price of
USOP Common Stock, as reported on the Nasdaq National Market on the date on
which such options are granted. The options shall have a ten-year term and shall
vest 25% per year over the first four years after the date of grant. Employee
may, at his discretion, request that any or all of such options granted
hereunder be granted to members of the Company's executive management team,
provided that such request is made in writing to USOP at least 10 days prior to
the date of the grant. The determination of when sufficient commission revenue
has been achieved to entitle Employee to receive options under this program
shall be made by USOP, in accordance with its standard accounting policies and
as set forth herein. Six months following the closing of an acquisition by USOP
of another company in USOP's Professional Travel Division, commission revenue
added in such six month period attributable to such acquisition shall be
annualized to determine annual commission revenue contributed by that
acquisition for purposes of assessing options to be awarded with respect to that
acquisition. Otherwise, commission revenue growth in USOP's Professional Travel
Division shall be measured at least annually. In addition, USOP shall retain
complete and final discretion regarding the terms and conditions of, and final
decision of whether to proceed with, any proposed acquisition within the
division, in light of USOP's overall financial and business goals and
objectives. For purposes of calculating commission revenue in connection with
determining the amount of Employee's incentive bonus hereunder, the Company
shall include the commission revenue of all companies in the travel industry
acquired by USOP, regardless of whether such acquisitions are made through the
Professional Travel Division.
In addition to the foregoing, under USOP's Incentive Bonus Plan, Employee
will be eligible to earn up to 100% of Employee's base salary in bonus
compensation, payable out of a bonus pool determined solely in the discretion of
the Board of Directors of USOP or a compensation committee thereof, depending
upon the achievement of specified criteria and payable in the form of cash,
stock options, or other non-cash awards, in such proportions, and in such forms,
as are determined solely by the Board of Directors of USOP or a compensation
committee thereof. Bonuses under the Incentive Bonus Plan will be determined by
measuring Employee's performance, the Company's performance and USOP's
performance based on criteria, weighted and measured against target performance
levels established by the Board of Directors of USOP or such compensation
committee.
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Employment Agreement - Professional Travel Corp., U.S. Office Products Co. and Edward S. Adams
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