EXHIBIT 10.5
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 24th day of January, 1997, is by
and between SFI Corp., a New York corporation (the "Company") and a wholly-owned
subsidiary of U.S. Office Products Company ("USOP"), a Delaware corporation, and
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇ ("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
four (4) years (the "Term").
2. POSITION AND DUTIES. The Company hereby employs Employee as President.
As such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a President of a subsidiary of USOP such as the
Company and assigned to Employee by the Board of Directors of the Company (the
"Board"). Employee will report directly to the Board. Employee hereby accepts
this employment upon the terms and conditions herein contained and agrees to
devote substantially 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 $400,000 per year, payable on a regular basis in
accordance with the Company's standard payroll procedures, but not less
often 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 in such amount, at such times as are specified in Exhibit A attached
hereto. The manner of payment, and form of consideration, if any, shall be
determined by the Compensation Committee of the USOP Board of Directors, in
its sole and absolute discretion, and such determination shall be binding
and final. 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. Employee shall be entitled to receive an incentive bonus under
this section solely to the extent that the amount of the bonus calculated in
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accordance with this section and Exhibit A is determined to exceed $100,000
(i.e., the maximum incentive bonus Employee shall be eligible to receive
shall be $300,000).
(c) PERQUISITES, BENEFITS, AND OTHER COMPENSATION. During the Term,
Employee shall be entitled to receive such perquisites and benefits as are
customarily provided to a president (or other designation of the chief
executive officer) of a subsidiary of USOP, subject to such changes,
additions, or deletions as the Company may make from time to time, as well
as such other perquisites or benefits as may be specified from time to time
by the Board.
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 the Company may request
that he 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, 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.
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 thirty (30) days after written notice to the 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 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 (6) months from the effective date of termination, or (ii) whatever
time period is remaining under the Term. Such payments shall be made in
accordance with the Company's regular payroll cycle.
(c) TERMINATION BY THE COMPANY "FOR CAUSE." The Company may terminate
Employee's employment hereunder ten (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 ten (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 material duties
hereunder, intentional nonperformance or mis-performance of such duties, or
refusal to abide by or comply with the directives of the Board, his superior
officers, or the Company's policies and procedures, which actions continue
for a period of at least ten (10) days after receipt by Employee of written
notice of the need to cure or cease; (iii) Employee's willful dishonesty,
fraud, or misconduct with respect to the business or affairs of the Company
or USOP, and that in the reasonable judgment of the Company or USOP
materially and adversely affects the operations or reputation of the Company
or USOP; (iv) Employee's conviction of a felony or other crime involving
moral turpitude; or (v) Employee's abuse of alcohol or drugs
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(legal or illegal) that, in the Company's reasonable judgment, substantially
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.
(i) At any time after the commencement of employment, the Company
may, without cause, terminate Employee's employment, effective thirty
(30) days after written notice is provided to the Employee. Should
Employee be terminated by the Company without cause, Employee shall
receive from the Company the base salary at the rate then in effect for
the longer of (i) six (6) months from the date of termination, or (ii)
whatever time period is remaining under the Term. Such payments shall be
made in accordance with the Company's regular payroll cycle.
(ii) At any time after the commencement of employment, the Employee
may terminate this Agreement for Good Reason upon giving the Company
thirty (30) days prior written notice. If Employee terminates this
Agreement for Good Reason, Employee shall receive from the Company the
base salary at the rate then in effect for the lesser of (i) six (6)
months from the date of termination, or (ii) whatever time period is
remaining under the Term. For purposes of this Agreement, Good Reason
shall mean:
(A) a breach by the Company of any material obligation to
Employee hereunder, which breach is not cured within thirty (30) days
after written notice thereof is given to the Company by Employee; or
(B) Employee's refusal to be relocated from his present residence
in the city of New York, New York to any other geographic location
pursuant to a request by the Company.
(iii) If Employee resigns or otherwise terminates his employment for
any reason other than Good Reason as defined herein, 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. Notwithstanding the
foregoing, 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 his 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 this Section 6(e) and Section 11 below and
Employee's obligations under Sections 7, 8, 9 and 10 below shall survive
such termination in accordance with their terms.
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) one (1) year, or (y)
the period during which Employee is receiving any severance pay from the
Company, Employee shall
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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, which were sold by the
Company or USOP on the date of the termination or Employee's employment,
in direct competition with the Company or USOP, within 50 miles of any
location where the Company or USOP conducts business (the "Territory") on
the date of the termination of Employee's employment;
(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 a prospective
acquisition candidate with respect to which Employee had actual knowledge
or was the subject of an acquisition analysis conducted by the Company or
USOP with respect to which Employee had actual knowledge.
(b) The foregoing covenants shall not be deemed to prohibit Employee
from acquiring as an investment not more than one percent (1%) 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, on the date of termination of Employee's employment,
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 50 miles of the 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.
(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
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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, the Employee may, upon
thirty (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 one year 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 in effect on the date of termination of Employee's
employment 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. To the extent Employee is
subject to a restriction on competitive activity as a party to that certain
Agreement and Plan of Reorganization, dated as of January 23rd, 1997, by and
among USOP, SFI Acquisition (Delaware) Corp., the Company and Employee or
that certain Agreement and Plan of Reorganization, dated as of January 23rd,
1997, by and among USOP, HBF Acquisition Corp., Hano Document Printers, Inc.
and the Stockholders Named Therein (the "Merger Agreements"), then Employee
shall abide by, and in all cases be subject to, the restrictive covenants
(whether in this Section 7 or in the Merger Agreements) 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.
(i) Notwithstanding any of the foregoing, if the Company terminates
Employee's employment pursuant to Section 6(b) or Section 6(d), then the
restrictions on Employee described in this Section 7 shall only apply for
the period during which Employee is receiving any severance pay from the
Company. The parties expressly agree that Employee shall have the right to
receive, but not the obligation to accept, severance compensation for a
termination under either Section 6(b) or Section 6(d).
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
the
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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.
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. INDEMNIFICATION. In the event Employee is made a party to any
threatened or pending action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by the Company or USOP
against Employee, and excluding any action by Employee against the Company or
USOP), by reason of the fact that he is or was performing services under this
Agreement or as an officer or director of the Company, then, to the fullest
extent permitted by applicable law, the Company shall indemnify Employee against
all expenses (including reasonable attorneys' fees), judgments, fines, and
amounts paid in settlement, as actually and reasonably incurred by Employee in
connection therewith. Such indemnification shall continue as to Employee even if
he has ceased to be an employee, officer, or director of the Company and shall
inure to the benefit of his heirs and estate. The Company shall advance to
Employee all reasonable costs and expenses directly related to the defense of
such action, suit, or proceeding within twenty (20) days after written request
therefore by Employee to the Company, PROVIDED, that such request shall include
a written undertaking by Employee, in a form acceptable to the Company, to repay
such advances if it shall ultimately be determined that Employee is or was not
entitled to be indemnified by the Company against such costs and expenses. In
the event that both Employee and the Company are made a party to the same
third-party action, complaint, suit, or proceeding, the Company (or, at its
option, USOP) will engage competent legal representation, and Employee agrees to
use the same representation; PROVIDED, that if counsel selected by the Company
shall have a conflict of interest that prevents such counsel from representing
Employee, Employee may engage separate counsel and the Company shall pay all
reasonable attorneys' fees of such separate counsel. The provisions of this
Section 11 are in addition to, and not in derogation of, the indemnification
provisions of the Company's By-laws. The foregoing indemnification also shall be
applicable to Employee in his capacity as an officer, director,
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or representative of any subsidiary of USOP other than the Company, or any other
entity, but in each case only to the extent that Employee is serving at the
request of the Board or the Board of Directors of USOP.
12. 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 attorneys' 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.
13. 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 and
the successor company is engaged in substantially the same business as the
Company, 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 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.
14. 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 Agreements 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.
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15. NOTICE. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: SFI Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
with a copy to: U.S. Office Products Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. Director, Esq.
To Employee: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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 hereof 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 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 the State of New York, without regard to its conflict
of laws principles.
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[Execution Page Following]
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
SFI CORP.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
EXECUTIVE VICE PRESIDENT
EMPLOYEE
/s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇
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EXHIBIT A
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 by 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 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 the following criteria, weighted as indicated, and
measured against target performance levels established by the Board of Directors
of USOP or such compensation committee: (i) USOP's profits--25%; (ii) the profit
of the Company--50%; and (iii) revenue growth of the Company due to
acquisitions--25%. For purposes of this Exhibit A, the "Company" shall mean SFI
Corp and Hano Document Printers, Inc.
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