EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the ____ day of _____, 1998, by and
between GLOBAL COMBINED TECHNOLOGIES, INC., an Oklahoma
corporation ("Company"), and O. DEAN HIGGANBOTHAM ("Employee").
W I T N E S S E T H :
WHEREAS, Company is a fully-owned subsidiary of Pomeroy Computer
Resources, Inc., a Delaware corporation (_PCR_); and
WHEREAS, PCR has entered into an Stock Purchase Agreement
("Purchase Agreement") of even date pursuant to which it bought
one hundred percent (100%) of the outstanding stock of Company;
and
WHEREAS, Employee owns twenty five percent (25%) of the
outstanding stock of Company; and
WHEREAS, as an inducement for and in consideration of PCR
entering into the Purchase Agreement, Employee has agreed to
enter into and execute this Employment Agreement pursuant to
Section 5 thereof; and
WHEREAS, Company desires to engage the services of Employee,
pursuant to the terms, conditions and provisions as hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein set forth, the parties hereby
covenant and agree as follows:
1. Employment
. The Company agrees to employ the Employee, and
the Employee agrees to be employed by the Company, upon the
following terms and conditions.
2 Term
. The initial term of Employee's employment pursuant to
this Agreement shall begin on the ____ day of __________,
1998, and shall continue for a period of three (3) years
ending __________, 2001 unless terminated earlier pursuant
to the provisions of Section 10, provided that Sections 8,
9, 10(b), 10(c) and 11, if applicable, shall survive the
termination of such employment and shall expire in
accordance with the terms set forth therein.
3. Renewal
Term. The term of Employee's employment shall
automatically renew for additional consecutive renewal terms
of one (1) year unless either party gives written notice of
his/its intent not to renew the terms of this Agreement
sixty (60) days prior to expiration of the then expiring
term. Employee's base salary for each renewal term shall be
May 1, 1998 (10:40AM)
determined by Company, provided, however, Employee's annual
base salary for any renewal term shall not be less than the
base salary in effect for the prior year.
4.
Duties. Employee shall serve as President of Company.
Employee shall be responsible to and report directly to the
Board of Directors of Company. Employee shall devote his
best efforts and substantially all his time during normal
business hours to the diligent, faithful and loyal discharge
of the duties of his employment and towards the proper,
efficient and successful conduct of the Company's affairs.
Employee further agrees to refrain during the term of this
Agreement from making any sales of competing services or
products or from profiting from any transaction involving
computer services or products for his account without the
express written consent of Company.
5.
Compensation. For all services rendered by the Employee
under this Agreement (in addition to other monetary or other
benefits referred to herein), compensation shall be paid to
Employee as described in Exhibit _A_ attached hereto.
6.
Fringe Benefits. During the term of this Agreement,
Employee shall be entitled to the following benefits:
(a) Health Insurance - Employee shall be provided with
the standard family medical health and insurance
coverage maintained by Company on its employees.
Company and Employee shall each pay fifty percent
(50%) of the cost of such coverage.
(b) Vacation - Employee shall be entitled each year to a
vacation of three (3) weeks during which time his
compensation will be paid in full. Provided,
however, such weeks may not be taken consecutively
without the written consent of Company.
(c) Retirement Plan - Employee shall participate, after
meeting eligibility requirements, in any qualified
retirement plans and/or welfare plans maintained by
the Company during the term of this Agreement.
(d) Other Company Programs - Employee shall be eligible to
participate in any other plans or programs
implemented by the Company for all of its employees
with duties and responsibilities similar to Employee.
(e) Employee shall be responsible for any and all taxes
owed, if any, on the fringe benefits provided to him
pursuant to this Section 6.
7.
Expenses. During the term of Employee's employment
hereunder, Employee shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and
entertainment expenses or other out-of-pocket business
expenses incurred by Employee in fulfilling the Employee's
duties and responsibilities hereunder, including, all
expenses of travel and living expenses while away from home
on business or at the request of and in the service of the
Company, provided that such expenses are incurred and
accounted for in accordance with the reasonable policies and
procedures established by the Company.
8.
Non-Competition. Employee expressly acknowledges the
provisions of Section 7 of the Purchase Agreement relating
to Employee's Covenant Not to Compete with PCR and Company.
Accordingly, such provisions of Section 7 are incorporated
herein by reference to the extent as if restated in full
herein. In addition to the consideration received under
this Agreement, Employee acknowledges that as a shareholder
of GLOBAL COMBINED TECHNOLOGIES, INC., he has received
substantial consideration pursuant to such Purchase
Agreement and that as an inducement for, and in
consideration of Company entering into this Agreement,
Employee has agreed to be bound by such provisions of
Section 7 of the Purchase Agreement. Accordingly, such
provisions of Section 7 and Exhibit _____ and the
restrictions on Employee thereby imposed shall apply as
stated therein.
9. Non-Disclosure and Assignment of Confidential Information
.
The Employee acknowledges that the Company's trade secrets
and confidential and proprietary information, including
without limitation:
(a) unpublished information concerning the Company's:
(i) research activities and plans,
(ii) marketing or sales plans,
(iii) pricing or pricing strategies,
(iv) operational techniques,
(v) customer and supplier lists, and
(vi) strategic plans;
(b) unpublished financial information, including
unpublished information concerning revenues, profits
and profit margins;
(c) internal confidential manuals; and
(d) any "material inside information" as such phrase is
used for purposes of the Securities Exchange Act of
1934, as amended;
all constitute valuable, special and unique proprietary and trade
secret information of the Company. In recognition of this fact,
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the Employee agrees that the Employee will not disclose any such
trade secrets or confidential or proprietary information (except
(i) information which becomes publicly available without
violation of this Employment Agreement, (ii) information of which
the Employee did not know and should not have known was disclosed
to the Employee in violation of any other person's
confidentiality obligation, and (iii) disclosure required in
connection with any legal process), nor shall the Employee make
use of any such information for the benefit of any person, firm,
operation or other entity except the Company and its subsidiaries
or affiliates. The Employee's obligation to keep all of such
information confidential shall be in effect during and for a
period of five (5) years after the termination of his employment
in those states where Company has business offices; provided,
however, that the Employee will keep confidential and will not
disclose any trade secret or similar information protected under
law as intangible property (subject to the same exceptions set
forth in the parenthetical clause above) for so long as such
protection under law is extended.
(a) For purposes of this provision, the term _Company's
Trade Secrets_ shall include such information of PCR
and any of its subsidiaries.
10. Termination
.
(a) The Employee's employment with the Company may be
terminated at any time as follows:
(i) By Employee's death;
(ii) By Employee's physical or mental disability
which renders Employee unable to perform his
duties hereunder.
(iii) By the Company, for cause upon three (3) day's
written notice to Employee. For purposes of this
Agreement, the term "cause" shall mean termination
upon: (i) the engaging by Employee in conduct
which is demonstrably and materially injurious to
the Company, monetarily or otherwise, including
but not limited to any material misrepresentation
related to the performance of his duties; (ii) the
conviction of Employee of a felony or other crime
involving theft or fraud, (iii) Employee's gross
neglect or gross misconduct in carrying out his
duties hereunder resulting, in either case, in
material harm to the Company; or (iv) any material
breach by Employee of this Agreement.
(iv) By the Company at its discretion, without cause,
upon thirty (30) days written notice to Employee;
provided that Company complies with the provisions
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of Section 10(c).
(b) Compensation upon Termination: In the event of
termination of employment, the Employee or his estate,
in the event of death, shall be entitled to his annual
base salary and other benefits provided hereunder to
the date of his termination.
(c) In the event that Company would terminate Employee's
employment hereunder without cause pursuant to Section
10(a)(iv), Company shall be obligated to pay Employee,
as severance pay, Employee's annual base salary for the
remaining term, including the current renewal term, if
applicable, of the Agreement and (as set forth in
Section 2) as due.
11.
Disability. In the event that Employee becomes temporarily
disabled and/or totally and permanently disabled, physically
or mentally, which renders him unable to perform his duties
hereunder, Employee shall receive one hundred percent (100%)
of his base annual salary (in effect at the time of such
disability) for a period of one (1) year following the
initial date of such disability (offset by any payments to
the Employee received pursuant to disability benefit plans,
if any, maintained by the Company.) Such payments shall be
payable in twelve consecutive equal monthly installments and
shall commence thirty (30) days after the determination by
the physicians of such disability as set forth below.
For purposes of this Agreement, Employee shall be deemed to
be temporarily disabled and/or totally and permanently
disabled if attested to by two qualified physicians, (one to
be selected by Company and the other by Employee) competent
to give opinions in the area of the disabled Employee's
physical and/or mental condition. If the two physicians
disagree, they shall select a third physician, whose opinion
shall control. Employee shall be deemed to be temporarily
disabled and/or totally and permanently disabled if he shall
become disabled as a result of any medically determinable
impairment of mind or body which renders it impossible for
such Employee to perform satisfactorily his duties
hereunder, and the qualified physician(s) referred to above
certify that such disability does, in fact, exist. The
opinion of the qualified physician(s) shall be given by such
physician(s), in writing directed to the Company and to
Employee. The physician(s) decision shall include the date
that disability began, if possible, and the 12th month of
such disability, if possible. The decision of such
physician(s) shall be final and conclusive and the cost of
such examination shall be paid by Employer.
12.
Severability. In case any one (1) or more of the provisions
or part of a provision contained in this Agreement shall be
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held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this
Agreement. In such a situation, this Agreement shall be
reformed and construed as if such invalid, illegal or
unenforceable provision, or part of a provision, had never
been contained herein, and such provision or part shall be
reformed so that it will be valid, legal and enforceable to
the maximum extent possible.
13. Governing
Law. This Agreement shall be governed and
construed under the laws of the State of Kentucky and shall
not be modified or discharged, in whole or in part, except
by an agreement in writing signed by the parties.
14. Notices
. All notices, requests, demands and other
communications relating to this Agreement shall be in
writing and shall be deemed to have been duly given if
delivered personally or mailed by certified or registered
mail, return receipt requested, postage prepaid to the
following addresses (or to such other address for a party as
shall be specified by notice pursuant hereto):
If to Company, to: Pomeroy Computer Resources, Inc.
1020 Petersburg Road
Hebron, Kentucky 41048
With a copy to: James H. Smith III
Lindhorst & Dreidame Co., L.P.A.
312 Walnut Street, Suite 2300
Cincinnati, Ohio 45202
If to Employee, to: the Employee's residential address, as
set forth in the Company's records
With a copy to:
15. Enforcement of Rights
. The parties expressly recognize that
any breach of this Agreement by either party is likely to
result in irrevocable injury to the other party and agree
that such other party shall be entitled, if it so elects, to
institute and prosecute proceedings in any court of
competent jurisdiction in _________ County, Oklahoma, either
at law or in equity, to obtain damages for any breach of
this Agreement, or to enforce the specific performance of
this Agreement by each party or to enjoin any party from
activities in violation of this Agreement. Should either
party engage in any activities prohibited by this Agreement,
such party agrees to pay over to the other party all
compensation, remuneration, monies or property of any sort
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received in connection with such activities. Such payment
shall not impair any rights or remedies of any non-breaching
party or obligations or liabilities of any breaching party
pursuant to this Agreement or any applicable law.
16. Entire Agreement
. This Agreement and the Purchase Agreement
referred to herein contain the entire understanding of the
parties with respect to the subject matter contained herein
and may be altered, amended or superseded only by an
agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification, extension
or discharge is sought.
17. Parties in Interest
.
(a) This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or
obligations hereunder without first obtaining the
written consent of the other party hereto; provided,
however, that nothing in this Section 17 shall preclude
(i) Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or (ii)
executors, administrators, or legal representatives of
Employee or his estate from assigning any rights
hereunder to person or persons entitled thereto.
Notwithstanding the foregoing, this Agreement shall be
binding upon and inure to the benefit of any successor
corporation of Company
(b) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the assets of
the Company or the business with respect to which the
duties and responsibilities of Employee are principally
related, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent
that Company would have been required to perform it if
no such succession had taken place. As used in this
Agreement "Company" shall mean the Company as
hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers
the assumption agreement provided for in this Section
17 or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
18.
Representations of Employee. Employee represents and
warrants that he is not party to or bound by any agreement
or contract or subject to any restrictions including without
limitation any restriction imposed in connection with
previous employment which prevents Employee from entering
into and performing his obligations under this Agreement.
19.
Counterparts. This Agreement may be executed simultaneously
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in several counterparts, each of which shall be deemed an
original part, which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, this Agreement has been executed effective as
of the day and year first above written.
WITNESSES: COMPANY:
GLOBAL COMBINED TECHNOLOGIES,
INC.
__________________________
__________________________
By:_________________________________
Stephen Pomeroy
Chief Executive Officer
EMPLOYEE:
__________________________
__________________________
____________________________________
O. DEAN HIGGANBOTHAM
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EXHIBIT _A_
(a) BASE SALARY: During the term of this Agreement, Employee
shall be paid an annual base salary of Two Hundred Fifty Thousand
Dollars ($250,000.00) per year. Said annual base salary shall be
payable semi-monthly.
(b) QUARTERLY BONUS: In addition to Employee's base salary as
set forth in Section 5(a), for each quarter during the initial
term of this Agreement, Employee shall be entitled to a quarterly
cash bonus in the event Employee satisfies the following economic
criteria during such quarter:
QUANTITY SALES VOLUME OF
COMPANY YEAR ONE YEAR TWO YEAR THREE
(In Millions) (3% NPBT) (3.5%(NPBT (4% NPBT)
)
Greater than 22 but less $
than 23 3,500.00
Greater than 23 but less 4,933.00 $
than 24 3,500.00
Greater than 24 but less 6,367.00 4,933.00 $
than 25 3,500.00
Greater than 25 but less 7,800.00 6,367.00 4,933.00
than 26
Greater than 26 but less 9,233.00 7,800.00 6,367.00
than 27
Greater than 27 but less 10,667.00 9,233.00 7,800.00
than 28
Greater than 28 but less 12,100.00 10,667.00 9,233.00
than 29
Greater than 29 but less 13,533.00 12,100.00 10,667.00
than 30
Greater than 30 but less 14,967.00 13,533.00 12,100.00
than 31
Greater than 31 but less 16,400.00 14,967.00 13,533.00
than 32
Greater than 32 but less 17,833.00 16,400.00 14,967.00
than 33
Greater than 33 but less 19,267.00 17,833.00 16,400.00
than 34
Greater than 34 but less 20,700.00 19,267.00 17,833.00
than 35
Greater than 35 but less 22,133.00 20,700.00 19,267.00
than 36
Greater than 36 but less 23,567.00 22,133.00 20,700.00
than 37
Greater than 37 but less 25,000.00 23,567.00 22,133.00
than 38
Greater than 38 but less 25,000.00 23,567.00
than 39
Greater than 39 but less 25,000.00
than 40
(i) For purposes of this Section, the term _Gross Sales_
shall mean the gross sales of equipment, software and services by
Company during the applicable quarter set forth above. All
refunds or returns which are made during such quarter shall be
subtracted along with all accounts receivable derived from such
sales that are written off during such quarter in accordance with
Company's accounting system. The quarterly gross sales of
Company shall be determined by the Company's internally-generated
financial statements and the determination by the Company's Chief
Financial Officer shall be final, binding and conclusive upon all
parties. The Company's financial statement shall be provided to
Employee each month. Any amount due hereunder shall be paid
within thirty (30) days after the conclusion of such previous
quarter. Provided, however, until such date that is thirty (30)
days after the ASTEA accounting system is implemented and
operational at Company, Company shall advance as a non-refundable
draw the sum of Twelve Thousand Five Hundred Dollars ($12,500.00)
per quarter. The amount of such advance shall be a credit
against the amount that Employee shall be entitled to based on
the satisfaction of the applicable criteria set forth in Section
5(b). In the event the amount of such non-refundable draw
exceeds the amount earned by Employee under the aforementioned
criteria, Employee shall be entitled to retain any excess during
the applicable period. Within sixty (60) days of the conclusion
of the installation of ASTEA at Company, Company and Employee
will implement a reconciliation of all quarterly bonuses due and
owing Employee under the terms of Section 5(b) and the amount of
the non-refundable draws paid to Employee pursuant to the
provisions of this paragraph and will remit any additional
amounts, if any, that may be owed to Employee pursuant to Section
5(b) within such sixty (60) day period.
(c) In addition to Employee's base salary as set forth in
Section 5(a), any quarterly bonus compensation that Employee may
be entitled to as set forth in Section 5(b) above during each
year of the initial term of this Agreement, Employee shall be
entitled to a bonus, incentive deferred compensation and
incentive stock option award in the event Employee satisfies
certain economic criteria pertaining to Company's performance
and/or Pomeroy Computer Resources, Inc.'s (_PCR_) performance set
forth as follows:
COMPANY
YEAR END SALES (In Millions)* CASH STOCK OPTIONS
Greater than 90 but less than 95 $ 3,000
50,000.00
Greater than 95 but less than 75,000.00 5,125
100
Greater than 100 but less than 100,000.00 7,250
105
Greater than 105 but less than 108,335.00 9,375
110
Greater than 110 but less than 116,670.00 11,500
115
Greater than 115 but less than 125,005.00 13,625
120
Greater than 120 but less than 133,340.00 15,750
125
Greater than 125 but less than 141,675.00 17,875
150
Greater than 150 150,010.00 20,000
*Year end NPBT = 3% Year One, 3.5% Year Two, 4% Year Three
PCR
YEAR END SALES (In Millions) YEAR CASH STOCK OPTIONS
1
Greater than 585 with NPBT greater 7,500
than 5%
(i) For purposes of this Section, the term _Gross Sales_
shall mean the gross sales of equipment, software and services by
Company during the applicable period, except that the _Gross
Sales_ as used for PCR shall be determined on a consolidated
basis. In making said gross sales determination, all gains and
losses realized on the sale or other disposition of Company's (or
PCR's, as applicable) assets not in the ordinary course shall be
excluded. In addition, any gross sales of PCR relating to any
acquisitions that are closed in such year shall be excluded. All
refunds or returns which are made during such period shall be
subtracted along with all accounts receivable derived from such
sales that are written off during such period in accordance with
Company's and PCR's accounting system. Such gross sales and net
pre-tax profit margin of Company and PCR shall be determined by
the independent accountant regularly retained by Company and PCR
in accordance with generally accepted accounting principles and
the determination by the accountant shall be final, binding and
conclusive upon all parties hereto. In making said determination
of the applicable pre-tax profit margin of the Company and PCR,
commencing on the earlier of the installation of the ASTEA
accounting system at Company or January 1, 1999, a 1.5% MAS
Royalty fee on gross sales to Company shall be made incident to
the determination. Fifty percent (50%) of the amount determined
under Section 5(c) shall be payable to Employee within thirty
(30) days of the determination by the accountant as a bonus and
the remaining fifty percent (50%) will constitute incentive
deferred compensation which shall be payable to Employee
according to the terms of the Incentive Deferred Compensation
Agreement attached hereto and incorporated herein as Exhibit _A_.
Any Incentive Deferred Compensation shall be fully vested over a
three (3) year period, vesting thirty-three and one-third percent
(33_%) per year of employment from the effective date of this
Agreement.
Any award of the incentive stock options to acquire common
stock of PCR earned hereunder shall be at the fair market value
of the common shares as of January 5, 1999 or any other
applicable date, which shall mean with respect to such shares,
the average between the high and low bid and asked prices for
such shares on the over-the-counter market on the last business
day prior to the date on which the value is to be determined (or
the next preceding date on which sales occurred if there were no
sales on such date).
(d) The parties agree that in January, 1999 and January, 2000,
they will negotiate in good faith, the level of gross sales of
PCR for the aforementioned incentive stock option amount to be
earned for such years, which gross sales criteria shall be
predicated upon PCR's goals, projections and budgets established
at the outset of such fiscal year.
LD 107867-1