Exhibit 10.8
EMPLOYMENT AGREEMENT
This Agreement dated July 1, 2001, by and between Business Operation
Services Corp., having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("BOSC") and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ residing at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Employee").
1. Employment. BOSC agrees to employ Employee and Employee accepts
employment with BOSC pursuant to the terms and conditions set forth in this
Agreement. Employee will devote his full business time, attention and best
effort to the performance of his duties and responsibilities as an Employee of
BOSC for the benefit of BOSC and Westcon Group, Inc. and its subsidiaries
(collectively and individually "Affiliates"). Employee's duties,
responsibilities, title, hours of work and compensation, will be set, on an
annual basis, at the sole discretion of BOSC and its Affiliates. Employee's
title, until and unless changed by BOSC, is President and Chief Executive
Officer, Westcon Group, Inc.
2. Term. The term of this Agreement will commence as of July 1, 2001 and
continue for forty-two (42) months thereafter. After the initial forty-two (42)
month term, the Agreement will automatically renew for one (1) year term(s),
but may be terminated by either party on one hundred and eighty (180) days
prior notice. No such termination notice may be given prior to January 16,
2005.
3. Compensation. Except as otherwise provided in Section 4 herein,
Employee will receive compensation from BOSC for his employment, subject to
normal payroll procedures, as set forth herein.
(a) Base Compensation. Employee shall receive Base Compensation as
follows: (i) for the period July 1, 2001 through June 30, 2002, Five Hundred
Thousand Dollars ($500,000), (ii) for the period July 1, 2002 through June 30,
2003, Five Hundred Seventy-five Thousand Dollars ($575,000), (iii) for the
period July 1, 2003 through June 30, 2004, Six Hundred Fifty Thousand Dollars
($650,000), (iv) for the period July 1, 2004 through June 30, 2005 Seven
Hundred Thousand Dollars ($700,000), payable in equal monthly installments or
as otherwise agreed by the parties.
(b) Annual Bonuses. Employee shall receive an Annual Bonus for each fiscal
year ending February 28 during the term of this Agreement in the amount set
forth in this paragraph ("Annual Bonus") upon achievement of the Westcon's
Earnings Before Tax, as defined herein, ("EBT") goals set by resolution of the
Board of Directors of Westcon Group, Inc. for the applicable fiscal year ending
February 28 ("Target EBT"). In the event that Westcon's actual EBT for the
applicable fiscal year is greater or lesser than the Target EBT, Employee's
applicable Annual Bonus shall be adjusted by multiplying the applicable Annual
Bonus by Westcon's Actual EBT for the applicable fiscal year end divided by the
Target EBT for the applicable fiscal year.
Fiscal Year Annual Bonus
March 1, 2001 -- February 28, 2002 (FY 02) $250,000
March 1, 2002 -- February 28, 2003 (FY 03) $287,000
March 1, 2003 -- February 28, 2004 (FY 04) $325,000
March 1, 2004 -- February 28, 2005 (FY 05) $350,000
"EBT" shall not include extraordinary items not resulting from operations
of Westcon Group, Inc. and its subsidiaries ("Westcon"), including without
limitation the following: compensation charges against Westcon's earnings
before taxes resulting from the exercise of a Put/Call Option Agreement by
Westcon's shareholders; accounting charges against Westcon's earnings before
taxes resulting from Datatec Limited or its subsidiaries or affiliates owning
ninety-five (95%) of the issued and outstanding common shares of Westcon;
accounting charges resulting from subsidiaries of Westcon having been or being
purchased by Westcon from Datatec Limited, such as such charges resulting from
the purchase of Westcon GmbH and RBR Networks GmbH; gains or losses from the
line item known as "Discontinued Operations" in the consolidated balance sheets
and income statements of Westcon, gains or losses from Extraordinary or
Exceptional Events according the United States Generally Accepted Accounting
Principles; and all other adjustments that negatively affect EBT made at
Datatec Limited's request or Deloitte & Touche LLP's request that are not
required by GAAP.
Each Annual Bonus earned by Employee shall be paid to Employee no later
than two (2) weeks after the completion of the Financial Statements of Westcon
for the applicable fiscal year. For fiscal years after February 2002, Employee
shall receive an Annual Bonus, payable annually, calculated in accordance with
this paragraph and consistent with the first years Annual Bonus, provided
however that Employee and the Board of Directors of Westcon Group, Inc. shall
mutually agree upon the applicable Target EBT.
(c) Benefits. During Employee's employment with BOSC, Employee will have
the right to participate in and receive benefits of BOSC's employee benefit
plans, subject to compliance with each plan's requirements for participation,
including 401K, medical insurance, life insurance, expense reimbursement, stock
option plan, holidays and rejuvenation days.
4. Termination Payments. In the event that Employee's employment is
terminated then BOSC will pay or provide to Employee the following:
(a) by Employee for Good Cause, as defined herein, or BOSC for any
reason other than Good Cause, (i) Compensation, including the Base Compensation
as set forth in paragraph 3(a) for a period of (48) forty-eight months from the
commencement of this Agreement which remains unpaid on the date Employee's
employment is terminated (ii) a monthly amount equal to Employee's monthly base
compensation on the date Employee's employment is
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terminated for a period of eighteen (18) months from the last payment of
Compensation pursuant to Section 3 herein; (iii) an amount equal to Employer's
cost of maintaining the health insurance coverage for Employee and his family
in effect immediately prior to termination of Employee's employment for a
period of eighteen (18) months from the termination of employment; (iv) full
vesting of Fifty percent (50%) of the stock options provided to Employee by
reason of his employment with BOSC that are unvested at the time of termination
of Employee's employment and an extension of period of time within which such
options must be exercised to eighteen (18) months from the termination of
Employee's employment; and (v) any amount of the restrictive covenant fee
pursuant to a Non-competition Agreement entered into between the parties
("Restrictive Covenant Fee") that is not paid as of the date Employee's
employment is terminated, including any installment payments after the date
Employee's employment is terminated.
(b) In the event that Employee's employment is terminated by Employee for
any reason other than for Good Cause, or BOSC for Good Cause, then BOSC will
pay or provide to Employee the following: (i) a monthly amount equal to
Employee's monthly base compensation on the date Employee's employment is
terminated multiplied times Nine (9) payable in equal monthly installments over
a period of Eighteen (18) months from the last payment of Compensation pursuant
to Section 3 herein; and (ii) Any amount of the Restrictive Covenant Fee that
is not paid as of the date Employee's employment is terminated, including any
installment payments after the date Employee's employment is terminated.
For purposes of this Agreement, good cause for termination of Employee's
employment shall mean: (i) In the event of termination of employment by BOSC,
Employee's repeated, material incompetence, substandard productivity, or
unsatisfactory performance or attendance, violation of BOSC's or Affiliates'
material rules, regulations, policies, procedures or instructions, whether
written or oral after receipt of at least one (1) written warning from BOSC
regarding the same, material breach of any provision of this Agreement or
Employee's fiduciary duty to BOSC or Affiliates, or commission of acts of
dishonesty, engaging in any discriminatory or sexually harassing behavior or
using, possessing, or being under the influence of alcohol, illegal drugs, or
controlled substances on BOSC or Affiliates' property or while working for or
representing BOSC or any Affiliate; (ii) Death or total disability of Employee
as defined in BOSC's Long Term Disability Insurance Policy or in the event of
termination of employment by Employee, Employee is required to relocate without
Employee's acceptance, Employee's responsibility, authority, rank or title is
significantly reduced, Employee's annual compensation from Employer is less
than his then applicable annual base compensation or Employer materially
breaches any provision of this Agreement ("Good Cause").
5. Westcon Group, Inc. Stock Option Plan ("Plan"). BOSC will request that
Employee be nominated to receive an option to purchase shares of
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Westcon Group, Inc. ("Option"). In order to receive the Option, the Board of
Directors of Westcon Group, Inc., must approve Employee's nomination and
Employee must comply with all requirements of the Plan at the time the option
is granted. All options are subject to the terms and conditions of the Plan.
6. Work Product. All work product resulting from the performance of
Employee's job with BOSC or Affiliates will be the sole property of BOSC or
Affiliates. It is intended that work product include all developments of any
kind that relate to BOSC's or Affiliates' business or confidential information
or that the Employee conceives, makes, develops or acquires within the scope of
his employment by BOSC or while providing services to Affiliate, including
without limitation, any programs, trade secrets, discoveries, inventions,
improvements, ideas, diagrams, processes or designs, classes, curriculum,
custom courses and related training materials, whether or not reduced to
writing, patented, copyrighted or trademarked ("Work Product"). Employee will:
disclose the Work Product to BOSC or Affiliates; assign the Work Product to
BOSC or Affiliates where appropriate; and cooperate with BOSC or Affiliates as
necessary for BOSC or Affiliates to obtain patents, copyrights or other forms
of protection for the Work Product. Employee acknowledges that no additional
compensation will be due him with regard to any Work Product.
7. Confidentiality. All information encountered or coming within the
knowledge of Employee with regard to or arising out of his employment with BOSC
will be deemed proprietary and confidential and belong solely to BOSC or where
applicable Affiliates and be for BOSC's or Affiliates' sole use and benefit.
Information includes without limitation: all drawings, specifications, plans,
and other materials prepared in connection with his employment and all
information relating to BOSC's or Affiliates' business, its customers and their
business affairs, vendors, suppliers, methods, techniques, finances, processes,
apparatus and trade secrets, but does not include information generally known
to the public ("Information"). Employee will not disclose to third parties any
Information obtained in the course of employment with BOSC, unless required by
law to do so.
8. Restrictive Covenants. During Employee's employment with BOSC and,
Employee will not: (a) directly or indirectly become employed by, contract
with, become interested in or provide services to any active vendor, customer
or competitor of BOSC or Affiliates, as defined herein; (b) solicit, induce or
attempt to induce any active Employee, consultant, contractor, vendor or
customer of BOSC or Affiliates to discontinue any business or employment
relationship or to refrain from entering into a new business relationship with
BOSC or Affiliates.
For purposes of this Agreement, an active relationship is one that is in
existence during the term of Employee's employment by BOSC whether pursuant to
written contract or not, including a prospective customer relationship where
BOSC or Affiliates has solicited business during Employee's term of
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employment. The following will be presumed to be competitors of BOSC and its
Affiliates for purposes of this Agreement: ▇▇▇▇▇▇ Micro; Gates/Arrow; Merisel;
Access Graphics; Tech Data; Computer 2000; Azlan PLC; ▇▇▇▇▇▇ Group and any
two-tier distributor of similar size and market of the foregoing entities of
BOSC and Affiliates.
9. Arbitration. All disputes between Employee and BOSC, its successors,
assigns, Affiliates, parent, directors, officers, employees or agents with
regard to or arising out of Employee's employment or termination of employment
with BOSC or this Agreement ("Employment Disputes") will be submitted to
binding final arbitration with the J.A.M.S./Endispute in New York, New York and
in accordance with the rules of the J.A.M.S./Endispute then in effect. The
successful party in the arbitration may be entitled to reimbursement by the
other party of all reasonable attorneys fees, costs and arbitration expenses
incurred as a result of the arbitration, at the discretion of the arbitrator.
This agreement is intended to cover all civil claims with regard to or arising
out of Employee's employment by BOSC or termination of Employee's employment
with BOSC, including without limitation, employment discrimination on the basis
of race, gender, age, religion, color, national origin, disability and veteran
status (including claims under Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act, the Americans with Disabilities Act and
any other claims under local, state or federal law concerning employment or
employment discrimination) and claims based on public policy.
THE PARTIES ACKNOWLEDGE AND AGREE THAT: (A) ARBITRATION WILL BE THE ONLY
PROCEEDING AVAILABLE TO THEM FOR ANY EMPLOYMENT DISPUTE AND THAT THEY ARE
WAIVING THEIR RIGHT TO PROCEED IN ANY AND ALL OTHER CIVIL LEGAL PROCEEDINGS,
INCLUDING WITHOUT LIMITATION, STATE OR FEDERAL COURT AND ANY ADMINISTRATIVE
PROCEEDINGS AVAILABLE TO THEM; (B) THEY ARE WAIVING THEIR RIGHT TO HAVE A JURY
DECIDE ANY EMPLOYMENT DISPUTE; (C) THE ARBITRATOR MAY GRANT ANY REMEDY OR
RELIEF THAT IS JUST AND EQUITABLE, OTHER THAN PUNITIVE, EXEMPLARY, DOUBLE OR
TREBLE DAMAGES; (D) THE DECISION OF THE ARBITRATOR WILL BE FINAL AND BINDING ON
THE PARTIES AND MAY BE JUDICIALLY ENFORCED; (E) THE ARBITRATOR WILL DETERMINE
ALL ISSUES OTHER THAN INJUNCTIVE RELIEF, INCLUDING WHETHER A DISPUTE IS SUBJECT
TO ARBITRATION; (F) NEITHER PARTY WAIVES THE RIGHT TO PROCEED IN COURT FOR
INJUNCTIVE RELIEF.
10. Injunctive Relief. Employee agrees that a breach of the covenants
contained herein may cause irreparable damage to BOSC for which there may not
be an adequate remedy at law and accordingly, BOSC will be entitled to
injunctive relief in addition to any other remedies available at law.
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11. Assignment and Survival. Neither party may assign this Agreement
without the other party's prior, written consent. The obligations under
paragraphs 3, 4, 6, 7, 8 and 9 will survive termination of this Agreement.
12. Severability. If any provision of this Agreement is held to be invalid
or unenforceable, the remainder of the provision and any other provisions of
this Agreement will remain in full force and effect.
13. Governing Law. This Agreement and the parties' rights and obligations
thereunder will be interpreted and construed in accordance with and governed by
the laws of the State of New York, other than conflict of laws.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original and all of which taken
together will constitute but one and the same instrument.
15. Notice. Any notice intended to be given hereunder will be sufficiently
given if sent by national overnight carrier, shipping charges prepaid,
addressed to the party at the address contained herein or any subsequent
address of which the parties have been given written notice. Any such notice
will be effective within Three (3) days of being deposited with the national
overnight carrier.
16. Entire Agreement. This Agreement contains the entire agreement between
the parties and supersedes all prior agreements with regard to the subject
matter hereof. This Agreement not be amended or modified except in writing,
signed by both parties and will be binding upon the parties, their heirs,
successors, legal representatives and assigns.
Business Operation Services Corp.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
------------------------------------ --------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: President Date: 7/1/01
Date: 7/17/01
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AMENDMENT TO EMPLOYMENT AGREEMENT
AMENDMENT (the "Amendment") dated as of May 7, 2004 to the Employment
Agreement (the "Agreement") dated as of July 1, 2001 by and between Business
Operation Services Corp., a predecessor to Westcon Group North America, Inc.
(the "Company"), and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Company pursuant to the
Employment Agreement;
WHEREAS, the Company and Employee desire to amend the Employment Agreement
to provide Employee with certain entitlements to indemnification;
NOW, THEREFORE, pursuant to Section 16 of the Employment Agreement, and in
consideration of the mutual promises and agreements contained herein and for
other good and valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Employee hereby amend the Employment
Agreement as follows:
Section 1. Amendment to the Employment Agreement. A new Section 17 is
hereby added to the Employment Agreement as follows:
17. Indemnification.
(a) The Company agrees that if the Employee is made a party, or is
threatened to be made a party, to any action, suit or proceeding for any reason
whatsoever, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director, officer or
employee of the Company or any of its affiliates or is or was serving at the
request of the Company as a director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such actual or threatened Proceeding is the Employee's alleged action,
inaction, error, statement or omission in an official capacity while serving as
a director, officer, member, employee or agent, in addition to any other rights
to indemnification, contribution, reimbursement or insurance otherwise
available to the Employee, the Employee shall be indemnified and held harmless
by the Company to the fullest extent legally permitted or authorized by the
Company's certificate of incorporation or bylaws or resolutions of the
Company's Board of Directors or, if greater, by the laws of the State of
Delaware (as the same may be amended to expand, but not to narrow, the
Employee's right to indemnification hereunder), against all cost, expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or otherwise suffered by
the Employee in connection therewith, and such indemnification shall continue
as to the Employee even if he has ceased to be a director, member, employee or
agent of the Company or other entity for any reason whatsoever and shall inure
to the benefit of the Employee's heirs, executors and administrators without
limitation as to time. The Company shall advance to the Employee all reasonable
costs and expenses incurred or to be incurred (as evidenced by an invoice
therefor) by him in connection with an actual or threatened Proceeding, and in
connection with the defense or enforcement by Employee of his rights hereunder,
within 20 calendar days after receipt by the Company of a written request for
such advance. Such request shall include an undertaking by the Employee to
repay the amount of such advance if it shall be finally judicially determined,
not subject to further appeal, that he is not entitled to be indemnified
against such costs and expenses.
(b) Neither the failure of the Company (including its board of directors,
independent legal counsel or shareholders) to have made a determination prior
to the commencement of any proceeding concerning payment of amounts claimed by
the Employee under Section 12(a) above that indemnification of the Employee is
legally permissible, nor a determination by the Company (including its board of
directors, independent legal counsel or shareholders) that indemnification of
the Employee is not legally permissible, shall create a presumption that the
Employee is not entitled to such indemnification.
(c) If the Company fails to acknowledge its obligation to indemnify the
Employee, or to pay such indemnification or advance costs and expenses, within
20 calendar days of a written request therefor by Employee, then Employee may,
but shall not be obligated, to seek enforcement of his rights hereunder.
(d) The provisions of Section 9 hereof shall not be applicable to a
dispute arising under, or Employee's enforcement of his rights under, this
Section 17."
Section 2. Effect of Amendment. Except as amended hereby, the Employment
Agreement shall remain unchanged and effective as of July 1, 2001. The
Employment Agreement as amended hereby shall continue in full force and effect.
Section 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York (other than its
rules of conflicts of laws to the extent that the application of the laws of
another jurisdiction would be required thereby).
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Section 4. Counterparts. This Amendment may be executed in several
counterparts with the same effect as if the parties executing the several
counterparts had all executed one counterpart.
IN WITNESS WHEREOF, the undersigned have executed this Amendment on May 7,
2004.
WESTCON GROUP NORTH AMERICA, INC.
By: /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ III
------------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ III
Title: VP-Finance, CFO 5/7/04,
9:50 AM EST
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 5/7/04, 10:00 AM EST
----------------------------------------
GUARANTEE
The undersigned hereby unconditionally and irrevocably guarantees the
obligations of the Company under this Amendment.
WESTCON GROUP, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
Witness: ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Date: May 7, 2004
Time: 10:00 a.m.
