EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Agreement is dated as of June 15, 1997, between Campo
Electronics, Appliances and Computers, Inc. ("Company") and
William E. Wulfers ("Wulfers").
1. Employment. Wulfers will be the Company's President and
Chief Executive Officer ("CEO"), beginning on the date hereof and
continuing until August 31, 2000, unless sooner terminated as
provided herein. He will be appointed a director of the Company,
which will use its best efforts to cause him to be elected
thereafter by its shareholders during his employment. He will
also serve as a director and/or officer of any subsidiary. He
will devote his entire time and attention during normal business
hours to Company business, but he may serve as a member of the
Board or the like of any other entity if doing so does not
unreasonably interfere with his responsibilities.
2. Insurance, etc. The Company will during Wulfers's
employment maintain the same director and officer liability
insurance for him as it has for its other officers and directors;
and will use its reasonable best efforts to maintain the
exculpation and indemnification provisions in its Articles and
By-laws and, if the law permits more protection, to add it.
3. Compensation. The Company will provide for Wulfers for
all services by him, the salary, bonus, stock incentive and other
benefits described in Appendix A, which will not be reduced
without his written consent. He will also be reimbursed for
out-of-pocket expenses incurred on the Company's behalf, upon
presentation of reasonable supporting documentation. All
payments will be net of applicable withholding for taxes and
other required amounts ("Withholding").
4. Disability and Death. (a) If Wulfers becomes Disabled,
the Company may by thirty days written notice to him terminate
his employment unless within such thirty days he becomes capable
of rendering and resumes full time services of the character
contemplated hereby. If he is terminated because he becomes
Disabled, the Company will provide him the benefits described in
Appendix B (less Withholding). "Disability" means:
(i) A condition that would entitle him to benefits
under the Company's long-term disability insurance policy
in effect at the time; or
(ii) If the Company has no such policy, his physical
or mental incapacity to satisfactorily discharge his
duties for 90 consecutive days, if a duly qualified
physician chosen by the Company and acceptable to him or
his legal representatives so certifies in writing, and
the Board determines that he has become disabled.
(b) If Wulfers dies while employed, the Company will
provide his personal representative(s) and/or beneficiaries
designated to the Company in writing with the benefits described
in Appendix B (less Withholding).
5. Termination by Company. If Wulfers is terminated by the
Company for any reason other than Disability or Cause, the
Company will pay him the benefits described in Appendix C (less
Withholding). If his employment is terminated by the Company for
Cause, the Company will pay him the benefits described in
Appendix D (less Withholding). Notwithstanding the foregoing,
his termination after a Change of Control (as defined in Section
1.2 of the Company's Severance Pay Plan (the "Severance Plan"))
will not entitle him to any benefits pursuant to Appendix C or D,
but instead the benefits in accordance with the Severance Plan.
"Cause" means Wulfers's (i) willful and continuing failure
to perform substantially the services contemplated (other than
because of his Disability) within a reasonable time after a
written demand is delivered to him by a representative of the
Board which specifically identifies such failure, or (ii) willful
engaging in misconduct materially injurious to the Company.
6. Termination by Wulfers. (a) If Wulfers terminates his
employment for "Good Reason," the Company will pay him the
benefits described in Appendix C. "Good Reason" means the
Company's:
(i) assigning him any responsibilities inconsistent
with his status, title or position as, or any removal or
failure to reappoint him as, President and CEO, if the
same continues for ten days after written notice thereof
by him to the Company;
(ii) failure to pay when due any amounts hereunder or
to perform any of its material obligations hereunder, if
the same continues for ten days after written notice
thereof is given by him to the Company; or
(iii) requiring him to be based anywhere other than
within a 75-mile radius of the New Orleans, Louisiana
area except for required travel in the Company's ordinary
course of business.
Wulfers's right to terminate his employment for a particular Good
Reason shall end if the Company notifies him in writing that Good
Reason exists specifying the applicable provision hereof and he
fails to exercise such right within 60 days of actual receipt of
such notice.
(b) If Wulfers terminates his employment without Good
Reason, the Company will pay him the benefits described in
Appendix D.
7. Notice of Termination. Any purported notice of termina-
tion shall be given in writing, and if it purports to be for
Cause or for Good Reason, it must specify the termination
provision relied upon and detail the circumstances claimed to
provide Cause or Good Reason.
8. Confidentiality. During his employment and for 15 years
thereafter, Wulfers will not disclose to anyone other than as
authorized by the Company or as required by law or as necessary
for him to perform his duties, any non-public data concerning the
Company in his possession, or any written list(s) of the
Company's customers, suppliers or vendors, or use such
information or lists for his personal benefit, and upon
termination of his employment he will deliver any such
information and list(s) in his possession to the Company.
9. Non-Competition. If his employment is terminated by the
Company for Cause or by him without Good Reason, Wulfers will
not, for two years thereafter, directly or indirectly, be
connected in any manner with any Competitive Business within the
Restricted Market, in competition with the Company Business being
carried on there, so long as the Company carries on a like
business there, except for investments in any publicly held
company of not more than one percent of the equity interest
thereof. "Competitive Business" means any business or line of
business that (i) in whole or in part, is the same as,
substantially similar to, or competitive with, any facet of the
Company Business and (ii) operates, sells, markets, competes or
derives revenue in the Restricted Market. "Company Business"
means the business in which the Company is currently engaged,
including the retail sale and installation of (i) major home
appliances, (ii) consumer electronics and (iii) home office
products. "Restricted Market" means the parishes in Louisiana of
Orleans, Jefferson, East Baton Rouge, St. Tammany, Caddo,
Bossier, Ouachita and Calcasieu and all counties within other
states, within which the Company is then engaged in Company's
Business as specified in writing to Wulfers by the Company at the
time of termination. This covenant shall be deemed a separate and
divisible covenant in each state in which it is sought to be
enforced.
10. Injunctive Relief. If Wulfers breaches or threatens
breach of Paragraph 8 or 9, the Company will be entitled to an
injunction, without bond, restraining him from violating such
Paragraph, in addition to any other remedy it may have.
11. Proprietary Rights. Wulfers agrees to and hereby does
assign to the Company all his rights in and to all inventions,
business plans, work models or procedures, whether or not
patentable, which are made or conceived solely or jointly by him
at any time during his employment or with the use of Company time
or materials. He will disclose to the Company all facts known to
him concerning such matters and at the Company's expense do
everything reasonably practicable to aid it in obtaining and
enforcing proper legal protection for, and vesting in the Company
title to, such matters. At any time, at the Company's request
and expense, he will promptly execute a specific assignment of
title to the Company, and perform any other acts reasonably
necessary to implement the foregoing assignment.
12. Representations and Warranties. Wulfers represents and
warrants that he is under no restriction or obligation
inconsistent with the execution of this Agreement or the
performance of his obligations hereunder, nor any physical or
mental disability that would hinder the performance of his
obligations hereunder.
13. Binding Effect. This Agreement is subject to approval
by, and the Company shall take all necessary steps available to
have it approved as soon as practicable by, the federal
bankruptcy court pursuant to Chapter 11 of the U.S. Bankruptcy
Code. Upon such approval, it shall be binding upon and inure to
the benefit of:
(a) The Company, and any successors or assigns, whether
by way of a merger or consolidation, or a sale of all or
substantially all of its assets, or otherwise; but, if the
Company assigns this Agreement, it shall nevertheless remain
liable to Wulfers in accordance with its terms; and
(b) Wulfers, his estate, his executors, administrators,
heirs and beneficiaries, none of whom shall be permitted to
assign this Agreement or any rights or obligations hereunder.
14. Expenses for Contests. The Company will pay as
incurred, to the extent permitted by law, all reasonable time-
based legal fees and expenses which Wulfers may incur as a result
of any contest of the validity or enforceability of, or liability
under, any provision hereof, but if it is determined by a court
that the position of Wulfers in any such contest is unreasonable
or frivolous, he must reimburse the Company for any fees and
expenses so paid by it.
15. Notices. Any notice required hereunder shall be in
writing, shall be deemed to have been received when delivered in
person, or, if mailed, shall be deemed to have been received on
the third business day after it is deposited in the United States
mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be addressed as
follows:
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If to the Company, with a copy to:
addressed to:
Board of Directors Barbara Treuting Casteix, Esq.
Campo Electronics, Barrios Kingsdorf & Casteix, L.L.P.
Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor 701 Poydras Street, Suite 3650
Covington, LA 70433 New Orleans, LA 70139
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If to Wulfers, addressed to William E. Wulfers, 300
Linebarger, Bentonville, AR 72712.
or such other address as to which any party may have notified the
other in writing.
16. Governing Law. This Agreement shall be governed by
Louisiana law.
17. Entire Understanding; Waiver. This Agreement, including
the Appendices, all of which are herein incorporated by
reference and made a part hereof, contain the entire understand-
ing between Wulfers and the Company relating to his employment.
No provision hereof or the Appendices may be modified, amended or
waived except in a writing signed by both parties. The waiver by
either party of a breach of any provision hereof shall not
operate or be construed as a waiver of any subsequent breach
thereof.
18. Severability. If any provision hereof, or its
application to any person or circumstance, shall at any time or
to any extent be invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each provision
shall be valid and enforced to the fullest extent permitted by
law.
19. Non-Exclusivity. No remedy specified herein is
exclusive.
20. Mitigation. Wulfers shall not be required to mitigate
damages, nor shall the amount of any payment provided for
hereunder be reduced by any compensation earned by him from
another employer.
21. Continuation. The terms hereof shall not be
automatically continued beyond termination of this Agreement even
if Wulfers's employment continues thereafter. Any continuation
of this Agreement shall only be by express written agreement of
Wulfers and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ RON FORMAN
Title: Chairman, ManagementCommittee and
Member, Compensation Committee
/s/ WILLIAM E. WULFERS
William E. Wulfers
APPENDIX A
Salary
Wulfers shall be paid bi-weekly a salary at an annualized
rate of $300,000.
Bonus
For the fiscal year ending August 31, 1997, Wulfers shall
be entitled to a bonus of $20,833.
For the fiscal year ending August 31, 1998, Wulfers shall
be entitled to a bonus of $100,000.
For each of the fiscal years ending August 31, 1999 and
2000, Wulfers shall be entitled to a bonus equal to $500
per basis point of pre-tax net profit margin as derived by
dividing the Company's pre-tax net profit (without taking
into account any extraordinary items of income or expense)
by the Company's gross revenues. For example, if gross
sales are $200,000,000 and pre-tax net profit is
$2,000,000 then profit margin equals 100 basis points and
the bonus due is $50,000.
Any bonus payable pursuant to this Appendix A shall be
paid in cash not later than the tenth day following the
date the audited financial statements for the period to
which such bonus relates have been completed.
Other Benefits
A. Restricted Stock Award
On the date hereof, Wulfers shall be given 100,000 shares
of Campo restricted common stock, of which 60,000 shares
shall be vested immediately upon grant, an additional
30,000 shares shall vest on the first anniversary date of
the Agreement, and 10,000 shares shall vest on the second
anniversary date of the Agreement. Such shares shall be
granted pursuant to the Company's Stock Incentive Plan and
a Restricted Stock Agreement.
B. Stock Options
Employee shall be granted stock options for Campo common
stock as follows:
Date hereof ............. Options for 100,000 shares
First Anniversary Date....Options for 100,000 shares
Second Anniversary Date...Options for 100,000 shares
No option granted hereunder shall vest and become
exercisable by Wulfers until August 31, 2000. All options
shall have an exercise price equal to the fair market
value of a share of Campo common stock as of the date
immediately preceding the date the option is granted as
provided in the Stock Incentive Plan. All Stock Options
shall be granted pursuant to the Company's Stock Incentive
Plan, as it will be amended, and a Stock Option Agreement
to be entered into with Wulfers.
C. Vacation
Wulfers shall be entitled to four weeks of non-cumulative
paid vacation time per year of employment.
D. Medical Benefits
Until such time as the relocation of Wulfers's family to
the New Orleans area is complete, he shall have the option
of either (i) continuing to be insured under the health
insurance policy of his spouse, in which case he shall be
reimbursed in an amount up to $376.40 per month in
connection with his payment of any health insurance
premiums owed to the health insurer by his spouse or (ii)
electing to be covered, at the Company's sole expense,
under the health insurance program made generally
available by the Company to its executive officers.
Following relocation, only the second option of the
foregoing sentence shall be available to Wulfers.
E. Moving Expenses
Wulfers shall be reimbursed for actual and reasonable
moving expenses, incurred in connection with the
relocation of his family to the New Orleans area,
appropriately invoiced to the Company.
F. Automobile
Wulfers shall be paid $500 per month for an allowance for
car expenses. Additionally, Wulfers shall be reimbursed
for automobile mileage incurred for Company business
travel at the mileage rate customarily paid by the Company
to employees for such travel, not to exceed the IRS
authorized rate.
G. Life Insurance
On or before August 31, 1997, the Company shall have
obtained (and thereafter maintain), at its expense, a
double indemnity term life insurance policy in the amount
of $500,000 insuring the life of Wulfers and naming his
spouse as the beneficiary thereof.
H. Housing Allowance
Wulfers shall be given a housing allowance of $2,000 per
month, which allowance shall continue until the earlier of
(i) the date his family relocates to the New Orleans area
or (ii) December 31, 1998.
I. Travel Expenses
Until such time as Wulfers's family relocates to the New
Orleans area, he shall be reimbursed for his travel
expenses between New Orleans and his current home, up to a
maximum of $15,000 in the aggregate.
J. Other Benefits
Wulfers shall be designated as a participant in the
Company's Severance Pay Plan and Summary Plan Description
(the "Severance Plan") and shall be eligible to
participate in any other benefit program provided by the
Company from time to time to its executive officers
generally.
APPENDIX B
DEATH OR DISABILITY BENEFIT
Payment within not less than 30 days from the date of
termination of (a) his salary and benefits through the date of
termination to the extent not already paid, and (b) an amount
equal to the salary he would have received had his employment
terminated six months after its actual termination.
APPENDIX C
SEVERANCE
Payable within 30 days after termination of employment: (a)
his salary and benefits through the date of termination to the
extent not already paid, and (b) an amount equal to the salary he
would have received had his employment terminated six months
after its actual termination
APPENDIX D
TERMINATION
Payment within not less than 30 days from the date of
termination of his salary through the date of termination, to the
extent not previously paid.