EXHIBIT 10.11
CONSULTING AND NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT, effective as of May 1, 1990,
between Inacomp Computer Centers, Inc. ("Corporation") and Rick Inatome
("Consultant").
W I T N E S S E T H:
WHEREAS, the Consultant has been Chairman, President and Chief Executive
Officer of the Corporation; and
WHEREAS, the Consultant has been instrumental in the development and success
of the Corporation; and
WHEREAS, The Consultant has been employed by the Corporation pursuant to an
Employment Agreement effective as of May 1, 1990 ("Employment Agreement"); and
WHEREAS, following the termination of the Employment Agreement for any
reason except the death of the Consultant or "Cause," as defined in Section 7 of
the Employment Agreement, the Corporation wishes to obtain consulting services
from the Consultant, and the Consultant is willing to provide consulting
services to the Corporation and its affiliates, pursuant to the terms and
conditions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants and
obligations hereinafter set forth, the parties hereto hereby agree as follows:
1. ENGAGEMENT AND TERM: (a) CONSULTANT STATUS. Commencing on the
termination of the Employment Agreement for any reason except the death of
the Consultant or "Cause" as defined in Section 7 of the Employment
Agreement, ("Consulting Commencement Date"), the Corporation agrees to
engage Consultant as an independent contractor for a period of five years
("Consulting Term"), During the Consulting Term and under the provisions of
this Agreement, the Consultant shall not be considered as having "employee"
status with the Corporation or its affiliates for any purpose. The
Consultant shall not have, by virtue of this Agreement, any authority to
enter into any contract or agreement on behalf of the Corporation or its
affiliates or to bind or commit the Corporation or its affiliates orally, or
in writing, in any manner whatsoever. The Consultant shall not represent
himself or hold himself out as having any such authority or as being an
employee of the Corporation or its affiliates.
(b) TERMINATION EVENTS. Notwithstanding Section 1(a) hereof, the
Consulting Term shall terminate ("Date of Termination") prior to the fifth
anniversary of the Consulting Commencement Date ("Scheduled Termination
Date") upon the occurrence of any of the following events:
(i) DEATH. The Consulting Term shall terminate upon the death of
the Executive.
(ii) DISABILITY. The Consulting Term shall terminate as a result
of the Consultant's Permanent Disability. Permanent Disability shall
mean that by reason of a physical or mental disability or infirmity which
has continued for a period of any 12 months during the term of this
Agreement, the Consultant is unable to perform the duties contemplated by
this Agreement. The Consultant agrees to submit such medical evidence
regarding such disability or infirmity as is reasonably requested by the
Corporation. The Consultant shall be deemed to be under a Permanent
Disability if the Consultant has been determined to be disabled under
Section 223(d) of the Social Security Act and is eligible for a
disability benefit under such Act.
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(iii) TERMINATION WITHOUT CAUSE. The Consulting Term shall
terminate upon the Consultant's Termination Without Cause.
Termination Without Cause shall mean the termination by the Corporation
of the Consultant's services other than by the Consultant's Voluntary
Termination, Termination For Cause or upon the Consultant's death or
Permanent Disability.
(iv) VOLUNTARY TERMINATION. The Consulting Term shall terminate
upon the Consultant's Voluntary Termination. Voluntary Termination
shall mean any voluntary termination of consulting services by the
Consultant.
(v) TERMINATION FOR CAUSE. The Consulting Term shall terminate upon
the Consultant's Termination For Cause. Termination For Cause shall
mean the Consultant's termination by the Corporation for "Cause." For
purposes of this Agreement, the Consultant's termination shall be deemed
to have been for Cause only if the termination of his services is the
result of the Consultant's willful engaging in dishonest or fraudulent
actions or omissions resulting or intended to result directly or
indirectly in any demonstrable material financial or economic harm to the
Corporation. For purposes of this subparagraph (v), no act or failure to
act on the Consultant's part shall be considered "willful" unless done or
omitted to be done by him not in good faith and without reasonable belief
that his action or omission was in the best interests of the Corporation.
(c) NOTICE OF TERMINATION. Any termination of the Consultant's
services by the Corporation or by the Consultant (other than termination
pursuant to Section 1(b)(i)) shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which indicates the specific
termination provision relied upon in this Agreement and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Consultant's Services under the provision so indicated.
(d) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Consultant is terminated by his death, the date of his death, (ii) if the
Consultant is terminated due to a Permanent Disability, 30 days after Notice
of Termination is given, (iii) if the Consultant is terminated pursuant to a
Termination For Cause, the date specified in the Notice of Termination, and
(iv) if the Consultant is terminated for any other reason, the date 30 days
after termination as provided by the Notice of Termination, unless otherwise
agreed to by the Consultant and Corporation, or as otherwise provided in
this Agreement.
2. SERVICES: The Consultant shall perform the following described
services as are requested of him from time to time by the Corporation or its
affiliates, consistent with his schedule and other commitments, and
Consultant shall have such powers and duties over the affairs and operations
of the Corporation and its affiliates as may be delegated to him during the
Consulting Term:
(a) CONSULTING SERVICES. During the Consulting Term, the Consultant
shall, upon the Corporation's or its affiliates' reasonable request
and with reasonable notice, provide consulting services to the
Corporation and its affiliates relating to the sale, manufacture and
development of computers and related products, including customer
relations, management and other activities in which the Corporation and
its affiliates may be engaged and with respect to which Consultant has
expertise. Such consulting services shall be provided at such times and
in such locations as the Corporation and the Consultant shall agree. The
Consultant shall perform the services required under this Agreement with
reasonable care and in a manner which the Consultant reasonably believes
is in, or not opposed to, the best interests of the Corporation and its
affiliates.
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(b) GOODWILL. Should the occasion arise, the Consultant shall
promote the business interests of the Corporation and its affiliates,
including speaking favorably of the granting of contracts to the
Corporation and its affiliates.
(c) PAYMENT FOR SERVICES. During the Consulting Term, the
Consultant shall be paid an annual consulting fee ("Consulting Fee")
in equal monthly installments, based on multiples of his last Base Salary
under the Employment Agreement: First Year -- 110%; Second Year -- 120%;
Third Year -- 130%; Fourth Year -- 140%; Fifth Year -- 150%.
(d) REIMBURSEMENT OF EXPENSES. In addition to the Consulting Fee
provided under Section 2(c) hereof, upon submission of proper
vouchers and in accordance with the policies and procedures established
by the Corporation in effect from time to time, the Corporation shall pay
or reimburse the Consultant for all normal and reasonable expenses,
including travel expense, incurred by the Consultant during the
Consulting Term in connection with the Consultant's services under this
Agreement.
3. TERMINATION BENEFITS. (a) DEATH. If the Consultant's services are
terminated by his death, the Corporation shall pay his surviving spouse, or
if he leaves no spouse, to his estate, any Consulting Fee earned by the
Consultant under Section 2 hereof through the Consultant's Date of
Termination.
(b) PERMANENT DISABILITY. If the Consultant's services are terminated
by his Permanent Disability, the Corporation shall pay the Consultant any
Consulting Fee earned by the Consultant under Section 2 hereof through the
Consultant's Date of Termination.
(c) TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. In the case of the
Consultant's Termination for Cause (as defined in Section 1(b)(v)), or
Voluntary Termination (as defined in Section 1(b)(iv)), the Corporation's
obligations to the Consultant shall cease after the Consultant's Date of
Termination, and the Corporation shall pay the Consultant any Consulting Fee
earned by the Consultant under Section 2 hereof through the Consultant's
Date of Termination.
(d) TERMINATION WITHOUT CAUSE. If, during the Consulting Term, the
Consultant's services shall be terminated based on a Termination Without
Cause (as defined in Section 1(b)(iii)), without 10 business days following
the Consultant's Date of Termination, the Consultant shall be entitled to
receive a single cash payment of the remaining Consulting Fees that would
have been paid to him from the Date of Termination through the Scheduled
Termination Date, as though the Consultant had not terminated his services
on the Date of Termination.
4. CONFIDENTIAL INFORMATION. The Executive agrees that for and during
the Consulting Term, any data, figures, projections, estimates, customer
lists, tax records, personnel histories and records, information regarding
manufacturing processes or techniques, information regarding sales,
information regarding properties and any other information regarding the
business, operations, properties or personnel of the Corporation
(collectively referred to herein as "Confidential Information") disclosed to
or learned by the Consultant shall be held in confidence and treated as
proprietary to the Corporation, and the Consultant agrees not to use or
disclose any Confidential Information except to promote and advance the
business interests of the Corporation. Further, the Consultant agrees that
upon termination of the Consulting Term he shall continue to treat such
Confidential Information as private and privileged and shall not use for his
own benefit or for the benefit of any other person or entity, any
Confidential Information except upon the written authorization of the Chief
Executive Officer of the Corporation, and he shall immediately return to the
Corporation and refrain from taking or copying any documents containing
Confidential Information. The Consultant agrees that the Corporation shall
be entitled to immediate (i.e., without prior notice) preliminary and final
injunctive relief to enjoin and restrain the unauthorized disclosure or use
of Confidential Information, to enjoin and restrain him from the
unauthorized taking or copying of documents containing Confidential
Information or to compel him to return any such documents to the
Corporation.
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5. COVENANT NOT TO COMPETE. The Consultant agrees that for a period of
one year following the termination of his consulting services with the
Corporation, he shall not, directly or indirectly, either as an equity
owner, an executive employee, or in any other capacity, engage in or be
interested in any business that is in competition with the Corporation or
any affiliate of the Corporation. The Consultant further agrees that the
Corporation shall be entitled to immediate (i.e., without prior notice)
preliminary and final injunctive relief to enjoin and restrain him from
performing any or all of the actions specified in this Section 5. The
parties agree that if this Section 5 is held by a court to be invalid or
unenforceable because it is too broad in any respect, it shall be narrowed
by the court to the extent required to be enforceable.
6. LATE PAYMENTS. Any payment made later than the time provided for in
this Agreement for whatever reason, shall include interest at the prime rate
plus 3 percent, which shall begin to accrue on the 10th business day
following the Consultant's Date of Termination. For purposes of this Section
6, "prime rate" shall be determined by reference to the prime rate
established by National Bank of Detroit or its successor, in effect from
time to time commencing on the 10th day following the Consultant's Date of
Termination.
7. NOTICES. Any notice required or permitted by this Agreement shall
be in writing, sent by registered or certified mail, return receipt
requested, addressed to the Board and the Corporation
at the Corporation's then principal office, or to the Consultant at the most
recent address on record with the Corporation, as the case may be, or to
such other address or addresses as any party hereto may from time to time
specify in writing for the purpose in a notice given to the other parties in
compliance with this Section 7. Notices shall be deemed given when received.
8. DISPUTES. Except as expressly set forth elsewhere in this
Agreement, it is mutually agreed between the parties that arbitration shall
be the sole and exclusive remedy to redress any dispute, claim or
controversy (hereinafter referred to as "grievance") involving the
interpretation of this Agreement or the terms, conditions or termination of
this Agreement or the terms, conditions, or termination of the Consultant's
Services with the Corporation. It is the intention of the parties that the
arbitration award shall be final and binding and that a judgment on the
award may be entered in any court of competent jurisdiction and enforcement
may be had according to its terms. Any and all grievances shall be disposed
of as follows:
(a) Any and all grievances must be submitted in writing by the
aggrieved party. Within 30 days following the submission of the written
grievance, the party to whom the grievance is submitted shall respond in
writing. If no written response is submitted within 30 days, the
grievance shall be deemed denied.
(b) If the grievance is denied, either party may, within 30 days of
the denial, refer the grievance to arbitration in Detroit, Michigan. Any
grievance shall be deemed waived unless presented within the time limits
specified herein. The arbitrator shall be chosen in accordance with the
Voluntary Labor Arbitration Rules of the American Arbitration
Association, then in effect. If the Consultant prevails under the
grievance, the Corporation shall bear the expenses of the arbitration
(including the reasonable attorneys' fees of the Consultant); provided,
further, that in the event the Corporation prevails, each party shall
bear its own expenses of the arbitration, and any expenses not properly
allocable to one party shall be borne jointly in equal parts.
(c) The arbitrator shall not have jurisdiction or authority to change
any of the provisions of this Agreement by alterations of, additions to
or subtractions from the terms hereof. The arbitrator's sole authority
shall be to interpret or apply any clause or clauses of this Agreement.
(d) Except as provided in Sections 4 and 5 hereof, the parties
stipulate that the provisions hereof, and the decision of the arbitrator
with respect to any grievance, shall be the sole and exclusive remedy for
any alleged breach of the consulting relationship. The parties
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hereby acknowledge that since arbitration is the exclusive remedy,
neither party has the right to resort to any federal, state or local
court or administrative agency concerning breaches of this Agreement
(except as provided in Sections 4 and 5 hereof) and that the decision of
the arbitrator shall be a complete defense to any suit, action or
proceeding instituted in any federal, state or local court before any
administrative agency with respect to any grievance which is arbitrable
as herein set forth. The arbitration provisions hereof shall, with
respect to any grievance, survive the termination or expiration of this
Agreement.
9. LEGAL FEES AND EXPENSES. To the extent that the Consultant prevails
under a grievance filed by either party pursuant to Section 8, the
Corporation shall reimburse all reasonable legal fees and expenses which the
Consultant may incur as a result of contesting the validity, enforceability,
or interpretation of, provisions in this Agreement. The Corporation shall
reimburse the Consultant within 10 business days following written demand
therefor by the Consultant. The Corporation's late reimbursement of legal
fees or expenses incurred by the Consultant under this Section 9 shall
accrue interest in accordance with the provisions of Section 6.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of Corporation and its affiliates, successors and
assigns, and shall be binding upon and inure to the benefit of the
Consultant and his respective legal representatives and assigns, provided
that in no event shall the Consultant's obligations to perform future
services for the Corporation and its affiliates be delegated or transferred
by the Consultant.
11. MODIFICATION OR WAIVER. No amendment, modification or waiver of
this Agreement shall be binding or effective for any purpose unless it is
made in a writing signed by the party against whom enforcement of such
amendment, modification or waiver is sought. No course of dealing between
the parties to this Agreement shall be deemed to affect or to modify, amend
or discharge any provision or term of this Agreement. No delay on the part
of the Corporation or the Consultant in the exercise of any of their
respective rights or remedies shall operate as a waiver thereof, and no
single or partial exercise by the Corporation or Consultant of any such
right or remedy shall preclude other or future exercise thereof. A waiver of
right or remedy on any one occasion shall not be construed as a bar to or
waiver of any such right or remedy on any other occasion.
12. SEVERABILITY. Whenever possible each provision and term of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision or term of this Agreement shall
be held to be prohibited by or invalid under such applicable law, then such
provision or term shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which is deemed to be an original and all of which
taken together constitute one and the same Agreement.
14. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not affect the construction or
interpretation of this Agreement.
15. NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against
any person.
16. GOVERNING LAW. This Agreement and all rights, remedies and
obligations hereunder, including, but not limited to, matters of
construction, validity and performance shall be governed by the laws of the
State of Michigan.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement this 31st
day of August, 1990.
INACOMP COMPUTER CENTERS, INC.
By: ________/s/_JOHN P. HARTWIG_______
John P. Hartwig
CHAIRMAN, COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
___________/s/_RICK INATOME___________
Rick Inatome, CONSULTANT
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AMENDMENT TO
CONSULTING AND NON-COMPETITION AGREEMENT
(THE "CONSULTING AGREEMENT")
DATED AUGUST 31, 1990, EFFECTIVE MAY 1, 1990
BETWEEN INACOMP COMPUTER CENTERS, INC.
("INACOMP") AND RICK INATOME ("CONSULTANT")
RECITALS
A. Inacomp has entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated April 17, 1991 with ValCom, Inc. ("ValCom") and Proval, Inc.
("Proval") whereby Proval will be merged into Inacomp, Inacomp will become a
wholly owned subsidiary of ValCom and ValCom will change its name to InaCom
Corp. ("InaCom") at the Effective Time. References to InaCom in this Amendment
shall also refer to ValCom prior to the Effective Time.
B. In connection with the Merger Agreement, the Consultant executed an
Employment Agreement with ValCom (the "InaCom Employment Agreement"), to become
effective upon the consummation of the merger contemplated in the Merger
Agreement (the "Effective Time").
C. The Employment Agreement between the Consultant and Inacomp, effective
as of May 1, 1990 (the "Inacomp Employment Agreement"), will terminate at the
Effective Time pursuant to the InaCom Employment Agreement.
D. Inacomp, the Consultant and ValCom desire that the Consulting Agreement
be amended in accordance with Section 6 of the InaCom Employment Agreement and
that InaCom become a party to the Consulting Agreement.
In consideration of the premises and mutual covenants and obligations
hereinafter set forth, the parties hereto agree as follows:
1. All references in the Consulting Agreement (other than in the
Recitals) to the "Corporation" are hereby amended to refer to InaCom Corp.,
a Delaware corporation, all references in the Consulting Agreement to the
"Employment Agreement" are hereby amended to refer to the "InaCom Employment
Agreement" and all references in the Consulting Agreement to the "Executive"
are hereby amended to refer to the "Consultant."
2. The reference to "Section 7 of the Employment Agreement" in the
first sentence of Section 1(a) is hereby amended to refer to "Section 4(g)
of the InaCom Employment Agreement."
3. The second, third and fourth sentences of Section 1(b)(v) of the
Consulting Agreement are hereby amended to read in their entirety as
follows: "For purposes of this Agreement, "Cause" shall have the same
meaning as defined in Section 4(g) of the InaCom Employment Agreement."
4. The reference to a period of "12 months" in the second sentence of
Section 1(b)(ii) is hereby amended to refer to a period of "6 months."
5. The reference to "the Corporation" in the third sentence of Section
1(b)(ii) is amended to refer to "the Corporation's Board of Directors."
6. This Amendment shall be effective as of the Effective Time and,
except as set forth herein, the Consulting Agreement shall be otherwise
unaffected hereby. It is affirmed that the term of the Consulting Agreement,
as amended, shall commence on the termination of the InaCom Employment
Agreement for any reason except the death of the Consultant or "Cause" as
defined in Section 4(g) of the InaCom Employment Agreement.
7. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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The undersigned have caused this Amendment to be duly executed as of the 5th
day of August, 1991.
INACOMP COMPUTER CENTERS, INC.
By: _________/s/_RICK INATOME_________
Rick Inatome
Its: PRESIDENT
VALCOM, INC.
By: _______/s/_BILL L. FAIRFIELD______
Bill L. Fairfield
Its: CHIEF EXECUTIVE OFFICER
___________/S/_RICK INATOME___________
Rick Inatome
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