Exhibit 10.31
EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the "Agreement") is entered into by
and between AMERICAN REPROGRAPHICS COMPANY, a Delaware corporation ("ARC) as the
employer; and KUMARAKULASINGAM SURIYAKUMAR, a resident of California, an
individual ("EXECUTIVE"), as the employee, on January 7, 2005, but shall be
effective only upon the date (the "Effective Date") of the effectiveness of a
Registration Statement on Form S-1 filed by ARC for the initial public offering
of ARC's shares of common stock. ARC and Executive may be referred to
collectively in this Agreement as the "Parties" and individually as a Party.
RECITALS
ARC has agreed to employ Executive and Executive has agreed to accept such
employment, subject to the terms and conditions set forth herein.
Now, therefore, in consideration of the promises, covenants and agreements
set forth in this Agreement, the Parties agree as follows:
1. POSITION AND DUTIES
(a) ARC hereby employs Executive as its President and Chief
Operations Officer ("COO"), and Executive agrees to serve ARC in such
capacity, upon the terms and conditions set forth herein.
(b) Executive shall report to the Chief Executive Officer of ARC
("CEO"). Executive's primary responsibilities shall be to (i) manage the daily
operations of ARC, including, sales and marketing, business development,
administration, and information systems, (ii) lead the execution of ARC's long
range corporate goals, and (iii) perform such other duties which are normal and
customary to the position of President and COO of a publicly traded
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company. Executive shall have the authority generally incident and necessary to
perform such duties. Executive will be a member of the executive team.
(c) During the term of this Agreement, Executive will devote
substantially all of his employment time and attention to the affairs of ARC
and use his best efforts to promote the business and interests of ARC. Executive
owes a fiduciary duty of loyalty, fidelity and allegiance to act at all
times in the best interests of ARC, and not to do any act which would
injure the business, interests, or reputation of ARC or any of its
subsidiaries or affiliates.
2. TERM
The term of this Agreement and of Executive's employment hereunder shall
commence on the Effective Date hereof and continue until the third (3rd)
anniversary of the Effective Date unless otherwise terminated in accordance with
the provisions hereof; provided, however, that this Agreement will automatically
be extended on a year-to-year basis on the terms and conditions set forth
herein, including the bonus provisions of Section 3(b), unless either party
gives written notice to the other at least one hundred twenty (120 (days) prior
to the expiration of the term of this Agreement, which includes any extensions,
that this Agreement shall terminate at the end of such term, or extension
thereof.
3. DIRECT COMPENSATION
In consideration of the services to be provided by Executive, Executive
shall receive compensation, less all applicable taxes, social security payments
and other items that ARC is required by law to withhold or deduct therefrom, as
follows:
(a) Base Salary. Executive's annual Base Salary shall be $650,000, paid
in 12 equal monthly installments on the last day of each calendar month.
Base Salary for any
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partial month shall be prorated on the basis of a 365 day year. Base Salary
shall be subject to annual review by ARC's CEO and ARC's Board of Directors
Compensation Committee (the "Compensation Committee"), and may be adjusted in
light of the financial performance of ARC or the personal performance of
Executive, but shall in no event be less than $650,000 per year during to the
term of this Agreement. After any such change, Executive's new level of Base
Salary shall be Executive's Base Salary for purposes of this Agreement.
(b) INCENTIVE BONUS. During the term of this Agreement, Executive shall
be eligible to receive an annual Incentive Bonus ("Incentive Bonus") as
follows:
(i) "EPS" as used herein means the pre-tax earnings per share
from operations (excluding extraordinary items) of the common stock of ARC
calculated under Generally Accepted Accounting Principles applied on a
consistent basis ("GAAP") by ARC's regular certified public accountants as
of the close of business on the last day of each relevant fiscal year. EPS
shall be calculated on a fully diluted basis, taking into account unexercised
options and warrants to the extent and in the manner required under GAAP. For
the fiscal year ended December 31, 2004, EPS shall be calculated by dividing (A)
the aggregate (rather than per-share) pro forma pre-tax earnings from
operations (excluding extraordinary items) of American Reprographics
Holdings, L.L.C. ("Holdings"), calculated under GAAP by ARC's regular
certified public accountants as if Holdings and its subsidiaries were a
consolidated group of corporations for that year, by (B) the number of shares
of common stock of ARC that would be used to calculate EPS on a fully diluted
basis under GAAP if the calculation were made at the closing of the initial
public offering of ARC common stock.
(ii) For each fiscal year of ARC ending December 31, 2005, 2006 or
2007, Executive shall receive an Incentive Bonus in an amount equal to $60,000
for
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each full percentage point by which EPS for such fiscal year exceeds by more
than 10 percentage points the EPS for the immediately preceding fiscal year,
after taking into account the amounts of (A) the Incentive Bonus earned by
Executive under this Section 3(b), and (B) a similar bonus earned by
Sathiyamurthy Chandramohan under a separate Employment Agreement entered into
contemporaneously with this Agreement. Executive shall not be entitled to any
Incentive Bonus for a partial percentage point increase. To illustrate: if EPS
for the fiscal year ended December 31, 2004 is $1.00, an Incentive Bonus of
$60,000 will be paid if EPS for the fiscal year ended December 31, 2005 equals
or exceeds $1.11 but is less than $1.12, and $120,000 will be paid if such EPS
equals or exceeds $1.12 but is less than $1.13. If EPS for the fiscal year ended
December 31, 2005 is $1.20, an Incentive Bonus of at least $60,000 will be paid
if EPS for the fiscal year ended December 31, 2006 equals or exceeds $1.332.
Notwithstanding the foregoing, if EPS for a fiscal year shall be less than EPS
for the fiscal year ended December 31, 2004, for purposes of calculating an
Incentive Bonus, if any, for the following year, EPS for the preceding year
shall be presumed to be the amount of EPS for the fiscal year ended December 31,
2004.
(iii) The Incentive Bonus shall be paid no later than 60 days following
the close of each fiscal year, in cash or ARC common stock, or partly in
each, as elected by Executive at least 20 days before the date such Incentive
Bonus is paid. To the extent that such Incentive Bonus is paid in ARC common
stock, such stock shall be valued using the average of the closing prices
of ARC common stock on the New York Stock Exchange for the 10 trading
days immediately preceding the date of issuance of ARC common stock in payment
of the Incentive Bonus, provided, however, that as a condition to receiving
ARC common stock Executive must deposit with ARC on the date of issuance cash
in the amount, if any, by which the total of employee withholding taxes
required to be withheld with respect to the entire
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Incentive Bonus exceeds the cash portion of the Incentive Bonus available for
withholding. To be eligible to receive a bonus, Executive must have been
employed by ARC during the entire fiscal year to which such Incentive Bonus
relates.
4. GENERAL BENEFITS
During the term of this Agreement, Executive shall be entitled to other
benefits provided by ARC to its senior executives from time to time, including
but not limited to, 401(k) and other retirement plans, deferred compensation,
paid holidays, sick leave and other similar benefits. Executive shall be
entitled to 4 weeks paid vacation each calendar year accrued and vested in
accordance with ARC's vacation policy applicable to senior management.
5. STOCK PLANS
In the sole discretion of the Board of Directors of ARC, Executive shall be
eligible to participate in stock option, stock purchase, stock bonus and similar
plans of ARC ( "Stock Plans") established from time to time by ARC.
6. GROUP INSURANCE OR BENEFIT PLANS
(a) During the term of this Agreement, Executive shall be
automatically covered by ARC group insurance programs (including any
self-insured programs sponsored by ARC), including medical, dental, vision,
disability, and life, if any. Executive's spouse and children which are
eligible for coverage may join the insurance programs, subject to ARC's
policies and applicable laws. The premiums for all insurance programs for
Executive and Executive's spouse and eligible children shall be paid by ARC.
(b) Provided that this Agreement has not terminated under Section 11(c)
or (f), ARC shall continue to provide to Executive, Executive's spouse
and Executive's eligible
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children, at no expense to either, medical insurance coverage under the same
group insurance or ARC-sponsored self-insurance, or equivalent coverage, as is
provided from time to time to ARC's senior executives. Such coverage shall
continue until the first to occur of (i) medical insurance coverage being
available through another employer, or (ii), in the case of Executive's eligible
children, the termination of eligibility under ARC's policies and applicable
laws, or (iii) in the cases of Executive and his spouse, qualification, in each
instance, for Medicare coverage.
7. SPECIAL BENEFITS
Executive shall be allowed additional employer-paid benefits of his choice
("Special Benefits"), including the lease of automobiles, social, golf or
athletic club memberships and other benefits not specifically provided for in
this Agreement, provided, however, that the annual cost to ARC shall not exceed
$10,000. Any employer taxes imposed upon ARC by reason of the furnishing of such
Special Benefits shall be included in the annual $10,000 limitation. Any unused
allowance for Special Benefits shall not be carried over to a subsequent year.
8. REIMBURSEMENT OF BUSINESS RELATED EXPENSES.
Executive shall be entitled to receive prompt reimbursement for reasonable
expenses incurred by him in performing services hereunder during the term of
this Agreement in accordance with the policies and procedures then in effect and
established by ARC for its employees. Executive may, at his discretion, fly
business class or first class on all airplane flights of more than one (1) hour
if Executive deems such to be appropriate for the conduct of his duties. In
addition to the Special Benefits set forth in Section 7 above, Executive shall
also be entitled to reimbursement of Executive membership dues and related
ongoing costs of appropriate professional organizations which are approved by
ARC's CEO.
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9. OBLIGATIONS AND RESTRICTIVE COVENANTS.
(a) OBLIGATIONS. During the term of this Agreement, Executive shall
not engage in any other employment, occupation or consulting activity for any
direct or indirect remuneration. This obligation shall not preclude Executive
from: (i) serving in any volunteer capacity with any professional, community,
industry, civic, educational or charitable organization; (ii) serving as a
member of corporate boards of directors, provided that ARC's CEO has
given written consent, and these activities or services do not materially
interfere or conflict with Executive's responsibilities or ability to
perform his duties under this Agreement; or (iii) engaging in personal
investment activities for himself and his family which do not interfere with
the performance of his duties and obligations hereunder.
(b) NON-COMPETITION; NON-SOLICITATION. The Parties hereto recognize
that Executive's services are unique and the restrictive covenants set forth in
this Section 9 are essential to protect the business (including trade
secret and other confidential information disclosed by ARC to, learned by or
developed by Executive during the course of employment by ARC) and the good
will of ARC. For purposes of this Section 9, all references to "ARC"
shall include ARC's predecessors, subsidiaries and affiliates. As part of the
consideration for the compensation and benefits to be paid to Executive
hereunder, during the term of this Agreement Executive shall not:
(i) Engage in any business similar or related to or competitive
with the business conducted by ARC described from time to time in ARC's Annual
Report on Form 10-K to its shareholders and Board (the "Core Business of ARC");
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(ii) Render advice or services to, or otherwise assist, any other
person, association, corporation, or other entity that is engaged,
directly or indirectly, in any business similar or related to, or competitive
with, the Core Business of ARC;
(iii) Transact any business in any manner with or pertaining to
suppliers or customers of ARC which, in any manner, would have, or is likely
to have, an adverse effect upon the Core Business of ARC; or
(iv) Induce any employee of ARC to terminate his or her
employment with ARC, or hire or assist in the hiring of any such employee
by any person or entity not affiliated with ARC.
For purposes of this Agreement, "affiliate" shall mean any entity which owns or
controls, is owned or controlled by, or is under common ownership or control,
with ARC.
10. CONFIDENTIALITY
Executive acknowledges that it is the policy of ARC to maintain as secret
and confidential all valuable and unique information heretofore or hereafter
acquired, developed or used by ARC relating to the business, operations,
employees and customers of ARC , which information gives ARC a competitive
advantage in the industry, and which information includes technical knowledge,
know-how or trade secrets and information concerning operations, sales,
personnel, suppliers, customers, costs, profits, markets, pricing policies, and
other confidential information and materials (the "Confidential Information").
(a) NON-DISCLOSURE. Executive recognizes that the services to be
performed by Executive are special and unique, and that by reason of his duties
he will be given, acquire or learn Confidential Information. Executive
recognizes that all such Confidential Information is
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the sole and exclusive property of ARC. Executive shall not, either during or
after his employment by ARC, disclose the Confidential Information to anyone
outside ARC or use the Confidential Information for any purpose whatsoever,
other than for the performance of his duties hereunder, except as authorized by
ARC in connection with performance of such duties.
(b) RETURN OF CONFIDENTIAL INFORMATION. Executive shall deliver
promptly upon termination of employment with ARC, or at any time requested by
ARC, all memos, notes, records, reports, manuals, drawings, and any other
documents, whether in electronic form or otherwise, containing any
Confidential Information, including without limitation all copies of such
materials in any format which Executive may then possess or have under his
control.
(c) OWNERSHIP OF INVENTIONS; ASSIGNMENT OF RIGHTS. Executive agrees
that all information, inventions, intellectual property, trade secrets,
copyrights, trademarks, content, know-how, documents, reports, plans,
proposals, marketing and sales plans, client lists, client files and materials
made by him or by ARC (the "Work Product") are the property of ARC and shall not
be used by him in any way adverse to the interests of ARC. Executive assigns to
ARC any and all rights of every nature which Executive may have in any such
Work Product; provided, however, that such assignment does not apply to any
right which qualifies fully under California Labor Code Section 2870. This
section shall survive any termination of this Agreement and the employment
relationship between Executive and ARC. Executive shall not deliver,
reproduce or in any way allow such documents or things to be delivered or
used by any third party without specific direction or consent of the Board.
Likewise, Executive shall not disclose to ARC, use in ARC's business, or
cause ARC to use, any information or material that is a trade secret of
others.
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(d) PREDECESSORS, SUBSIDIARIES AND AFFILIATES. For purposes of this
Section 10, references to ARC include its predecessors, subsidiaries and
affiliates.
11. TERMINATION.
Notwithstanding any other term or provision contained in this Agreement,
this Agreement and the employment hereunder will terminate prior to the
expiration of the term of this Agreement under the following circumstances:
(a) DEATH. Upon Executive's death.
(b) DISABILITY. Upon Executive becoming "Permanently Disabled", which,
for purposes of this Agreement, shall mean Executive's incapacity due to
physical or mental illness or cause, which, in the written opinion of
Executive's regular licensed physician, results in the Executive being unable
to perform his duties on a full-time basis for 6 months during a period of 12
months.
(c) TERMINATION BY ARC FOR CAUSE. Upon written notice to Executive, ARC
may terminate this Agreement for Cause, which, for purposes of this Agreement,
shall mean termination by action of the Board in its reasonable discretion
because of Executive's:
(i) willful refusal without proper cause to perform (other than
by reason of physical or mental disability or death) the duties set
forth in this Agreement or delegated from time to time in writing by ARC's CEO,
which remains uncorrected for 30 days following written notice to Executive by
ARC's CEO; or
(ii) gross negligence, self dealing or willful misconduct of
Executive in connection with the performance of his duties hereunder,
including, without limitation,
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misappropriation of funds or property of ARC or its subsidiaries or affiliates,
securing or attempting to secure personally any profit in connection with any
transaction entered into on behalf of ARC or its subsidiaries or affiliates, or
any willful act or gross negligence having the effect of injuring the
reputation, business or business relationships of ARC or its subsidiaries or
affiliates; or
(iii) fraud, dishonesty or misappropriation of ARC business and
assets that harms the business of ARC or its subsidiaries or affiliates; or
(iv) habitual insobriety, abuse of alcohol, abuse of prescription
drugs, or use of illegal drugs; or
(v) engaging in any criminal activity involving moral turpitude; or
(vi) indictment or being held for trial in connection with a
misdemeanor involving moral turpitude or any felony; or
(vii) conviction of a felony or entry into a guilty plea that
negatively reflects on Executive's fitness to perform the duties or harms the
reputation or business or ARC or its subsidiaries or affiliates; or
(viii) any material breach of any covenants under this Agreement
or other material policy of ARC, other than under clauses (i) through
(vii) of this Section 11(c) which remains uncorrected for 30 days following
written notice to Executive by the ARC's CEO.
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(d) TERMINATION BY ARC WITHOUT CAUSE. Upon written notice to Executive,
ARC may terminate this Agreement at any time without any Cause or reason
whatsoever.
(e) TERMINATION BY EXECUTIVE WITH GOOD REASON. Upon written notice to
ARC of any of the following "Good Reasons," and the failure of ARC to correct
the reduction, change or breach within 30 days after receipt of such
notice, Executive may terminate this Agreement after the occurrence of
(i) a material change by ARC in the nature of Executive's title,
duties, authorities and responsibilities set forth in this Agreement without
Executive's express written consent; or
(ii) a reduction in the nature of Executive's compensation as
established under this Agreement, other than as expressly permitted in this
Agreement, without Executive's express written consent; or
(iii) a change in the officer (other than a change in the
person who occupies such position) to whom Executive reports without
Executive's express consent; or
(iv) a material breach by ARC of any material sections of this
Agreement, other than as set forth in clauses (i) through (iii) of this Section
11(e); or
(v) a Change of Control, as defined in Section 11(g), as a result
of which Executive is not offered the same or comparable position in the
surviving company, or is offered such position but within twelve (12)
months after Executive accepts such position, Executive's employment is
terminated either without cause or for a Good Reason described in
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subsections (i), (ii), (iii) of this Section 11(e) or in subsection (iv) as to
the employment agreement then applicable to Executive.
(f) TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. Upon 45 days
prior written notice to ARC, Executive may terminate this Agreement and
resign from Executive's employment hereunder without any Good Reason.
(g) CHANGE OF CONTROL.
(i) For purposes of this Agreement, "Change of Control" shall mean:
(A) ARC merges or consolidates with any other corporation
(other than one of ARC's subsidiaries), as a result of which ARC is not the
surviving company, or the shares of ARC voting stock outstanding immediately
after such transaction do not constitute, become exchanged for or converted
into, more than 50% of the Voting Shares of the merged or consolidated company
(as defined below);
(B) ARC sells or otherwise transfers or disposes of all or
substantially all of its assets;
(C) Any third person or entity shall become the Beneficial
Owner, as defined by Rule 13(d)-3 under the Securities Exchange Act of
1934, in one transaction or a series of related transactions within any 12
month period, of at least 50% of the Voting Shares of ARC's then outstanding
voting securities.
(ii) For purposes of this Agreement, "Voting Shares" shall
mean the combined voting securities entitled to vote in the election of
directors of a corporation, including ARC, or the merged, consolidated or
surviving company, if other than ARC.
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12. SEVERANCE BENEFITS
(a) BASIC BENEFITS. Upon expiration or termination of this Agreement
for any reason, and subject to the provisions of Section 12(e), Executive
will be entitled to: (i) payment for all Base Salary and unused vacation
accrued and prorated, but unpaid, as of the effective date of termination,
(ii) payment, when due, of any earned but unpaid Incentive Bonus for the
preceding fiscal year, (iii) any unreimbursed business expenses authorized
by this Agreement, (iv) continuation of any benefits under Section 6(a) as
required by applicable law, and (v) such rights as then exist with respect
to then vested stock options, restricted stock or other rights under similar
plans.
(b) TERMINATION BY ARC FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON.
If this Agreement and Executive's employment hereunder is terminated by ARC
for Cause pursuant to Section 11(c), or by Executive without Good Reason
pursuant to Section 11(f), Executive shall not be entitled to any additional
payments or benefits hereunder.
(c) TERMINATION BY ARC WITHOUT CAUSE; TERMINATION BY EXECUTIVE WITH
GOOD REASON. If this Agreement and Executive's employment hereunder is
terminated by ARC without Cause pursuant to Section 11(d), or by Executive for
Good Reason as defined in Section 11(e), subject to Executive's compliance with
the provisions of Section 15 below, Executive shall receive the following
additional payments or benefits:
(i) Executive's then Base Salary for the remaining term of this
Agreement, paid as and when due as if this Agreement had not been terminated;
(ii) Continuation of coverage and premium payments by ARC under
ARC's group insurance programs for Executive and his eligible family members
under Section
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6(a) if this Agreement had not been terminated, and thereafter under Section
6(b) in accordance with the provisions of such Section;
(iii) Continuation of the Special Benefits under Section 7
of this Agreement, if this Agreement had not been terminated; and
(iv) All unvested stock options, restricted stock or similar rights
granted to Executive shall accelerate and become vested and exercisable
immediately as of the effective date of termination.
(d) TERMINATION BECAUSE OF DEATH OR DISABILITY OF EXECUTIVE. If
this Agreement and Executive's employment hereunder is terminated under
Sections 11(a) or (b) by reason of Executive's death or by reason of being
Permanently Disabled, Executive or his family shall be entitled to the
additional benefits described in Section 12(c)(ii) above.
(e) PARACHUTE PAYMENTS. In the event that the severance, acceleration
of stock options and other benefits provided for in this Agreement or
otherwise payable to Executive (i) constitute "parachute payments" within the
meaning of Section 280G (as it may be amended or replaced) of the Internal
Revenue Code of 1986, as amended or replaced (the "Code") and (ii) but for this
Section 12(e), would be subject to the excise tax imposed by Section 4999 (as
it may be amended or replaced) of the Code (the "Excise Tax"), then Executive's
benefits hereunder shall be either:
(i) provided to Executive in full; or
(ii) provided to Executive only as to such lesser extent which
would result in no portion of such benefits being subject to the Excise Tax,
whichever of the foregoing
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amounts, taking into account the applicable federal, state and local income
taxes and the Excise Tax, results in the receipt by Executive on an after-tax
basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under the Excise Tax. Unless ARC and
Executive otherwise agree in writing, any determination required under this
Section 12(e) shall be made in writing in good faith by ARC `s independent
public accountants (the "Accountants"). In the event of a reduction in benefits
hereunder, Executive shall be given the choice of which benefits to reduce. For
purposes of making the calculations required by this Section 12(e), the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code. ARC and Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section 12(e). ARC shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 12(e).
13. ARBITRATION AND EQUITABLE RELIEF
(a) ARBITRATION. In consideration of Executive's employment with ARC,
its promise to arbitrate all employment-related disputes and Executive's
receipt of the compensation paid to Executive by ARC, at present and in
the future, Executive agrees that any and all controversies, claims, or
disputes with anyone (including ARC and any employee, officer, director,
shareholder or benefit plan of ARC in their capacity as such or otherwise)
arising out of, relating to, or resulting from Executive's employment with
ARC or the termination of that employment with ARC, including any provision of
this Agreement, shall be subject to binding arbitration under the arbitration
rules set forth in the California Code of Civil Procedure section 1280 through
1294.2, including section 1283.05 collectively (the "Rules") and pursuant to
California law. Disputes which Executive agrees to arbitrate, and hereby
agrees to waive any
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right to a trial by jury, include without limitation, any common law claims,
statutory claims under Title VII of the Civil Rights Act of 1964, the Americans
With Disabilities Act of 1990, the Age Discrimination In Employment Act of 1967,
the Older Workers Benefit Protection Act, the California Fair Employment And
Housing Act, the California Labor Code (except for workers compensation or
unemployment insurance claims), or ERISA, claims of harassment, discrimination
or wrongful termination and any other statutory claims under state or federal
law.
(b) PROCEDURE. Any arbitration will be administered by JAMS and a
neutral arbitrator will be selected in a manner consistent with its rules
for the resolution of employment disputes. The arbitrator shall have the power
to decide any motions brought by any party to the arbitration, including
motions for summary judgment and/or adjudication and motions to dismiss and
demurrers, prior to any arbitration hearing. The arbitrator shall have the
power to award any remedies, including attorneys' fees and costs, available
under applicable law. ARC will pay for any administrative or hearing fees
charged by the arbitrator or JAMS except that Executive shall pay the first
$200.00 of any filing fees associated with any arbitration Executive
initiates. The arbitrator shall administer and conduct any arbitration in a
manner consistent with the Rules. To the extent that the JAMS rules for the
resolution of employment disputes conflict with the Rules, the Rules shall
take precedence. The decision of the arbitrator shall be in writing.
(c) REMEDY. Except as provided by the Rules and this Agreement,
arbitration shall be the sole, exclusive and final remedy for any dispute
between ARC and Executive. Accordingly, except as provided for by the Rules and
this Agreement, neither ARC nor Executive will be permitted to pursue court
action regarding claims that are subject to arbitration. Notwithstanding, the
arbitrator will not have the authority to disregard or refuse to enforce any
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lawful ARC policy, and the arbitrator shall not order or require ARC to adopt a
policy not otherwise required by law which ARC has not adopted.
(d) AVAILABILITY OF INJUNCTIVE RELIEF. In addition to the right under
the Rules to petition the court for provisional relief, ARC may also petition
the court for injunctive relief, notwithstanding any provision in this
Agreement requiring arbitration, where ARC alleges or claims a violation
of this Agreement, or any separate agreement between Executive and ARC
regarding trade secrets, confidential information or non-solicitation, or
California Labor Code ss.2870. No bond shall be required of ARC. Executive
understands and agrees that any breach or threatened breach of this
Agreement or of any such separate agreement will cause irreparable injury to
ARC or its subsidiaries or affiliates and that money damages will not provide
an adequate remedy therefore, and Executive hereby consents to the issuance
of an injunction. In the event either Party seeks injunctive relief, the
prevailing Party shall be entitled to recover reasonable costs and attorney fees
related thereto.
(e) ADMINISTRATIVE RELIEF. This Agreement does not prohibit Executive
from pursuing an administrative claim with a local, state or federal
administrative body such as the Department of Fair Employment and Housing, the
Equal Employment Opportunity Commission or the Workers' Compensation Board.
This Agreement does, however, preclude Executive from pursuing court action
regarding any such claim.
(f) VOLUNTARY NATURE OF AGREEMENT. Executive acknowledges and agrees
that he is executing this Agreement voluntarily and without any duress or
undue influence by ARC or anyone else. Executive further acknowledges and
agrees that he has carefully read this Agreement, that he has asked any
questions needed for him to understand the terms, consequences and binding
effect of this Agreement, and that he fully understands this
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Agreement, including that HE IS WAIVING HIS RIGHT TO A JURY TRIAL. Finally,
Executive acknowledges that he has been provided an opportunity to seek the
advice of an attorney of his choice before signing this Agreement.
14. GOVERNING LAW
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of California without regard to California
conflict of laws principles.
15. RELEASE
In exchange for the benefits and other consideration under this Agreement
to which Executive would not otherwise be entitled, Executive shall enter into
and execute a release substantially in the form attached hereto as Exhibit A
(the "Release") upon his termination of employment. Unless the Release is
executed by Executive and delivered to ARC within thirty (30) days after the
termination of Executive's employment with ARC, Executive shall receive only the
basic severance benefits provided under Section 12(a) of this Agreement and no
additional benefits under Section 12 or the extended health insurance coverage
under Section 6 (b) of this Agreement.
16. NOTICES
Any notices or other communications desired or required under this
Agreement shall be in writing, signed by the Party making the same, and shall be
deemed delivered when personally delivered or on the second business day after
the same is sent by certified or registered mail, postage prepaid, addressed as
follows (or to such other address as may be designated by like written notice):
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If to Executive: At the last residential address known by ARC
If to ARC: American Reprographics Company
700 North Central Avenue, Suite 550
Glendale, CA 91203
Attn.: Chief Executive Officer
17. SEVERABILITY
In the event that any provision of this Agreement becomes or is declared by
a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision.
18. ASSIGNMENT
Except as otherwise specifically provided herein, neither Party shall
assign this Agreement or any rights hereunder without the consent of the other
Party, and any attempted or purported assignment without such consent shall be
void; provided that Executive's consent under this Agreement shall not be
required hereby for any of the transactions involving a Change of Control. This
Agreement shall otherwise bind and inure to the benefit of the Parties hereto
and their respective successors, assigns, heirs, legatees, devisees, executors,
administrators and legal representatives.
19. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the Parties and supersedes
all prior or contemporaneous negotiations, correspondence, understandings and
agreements between the Parties regarding the subject matter of this Agreement.
Any prior employment agreement, bonus agreement or other compensation agreement
between Executive and ARC or any predecessor,
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subsidiary or affiliate of ARC, is hereby terminated on and as of the Effective
Date. This Agreement may not be amended or modified except in writing signed by
both Parties.
20. WAIVER
If either Party waives any breach of any provisions of this Agreement, he
or it shall not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this Agreement.
21. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first hereinabove set forth.
AMERICAN REPROGRAPHICS EXECUTIVE
COMPANY,
a Delaware corporation
/s/ K. Suriyakumar
By: /s/ S. Chandramohan ______________________________
________________________________________ Kumarakulasingam Suriyakumar
Sathiyamurthy Chandramohan Address: 2401 Via Diablo
______________________
Title: Chairman and Chief Executive Officer Diablo, CA 94528
______________________
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EXHIBIT A
RELEASE AGREEMENT
I understand that my position with American Reprographics Company ("ARC")
terminated effective _______________ (the "Separation Date"). ARC has agreed
that if I choose to sign this Agreement, ARC will pay me severance benefits
(minus the standard withholdings and deductions) pursuant to the terms of the
Executive Employment Agreement entered into on __________ __, 2004 between
myself and ARC (the "Severance Benefits). I understand that I am not entitled to
the Severance Benefits unless I sign this Agreement. I understand that in
addition to the Severance Benefits, ARC will pay me all of my accrued salary and
vacation, to which I am entitled by law.
In consideration for the Severance Benefits I am receiving under this
Agreement, I agree not to use or disclose any of ARC's proprietary information
without written authorization from ARC, to immediately return all Company
property and documents (including all embodiments of proprietary information)
and all copies thereof in my possession or control, and to release ARC and its
officers, directors, agents, attorneys, employees, shareholders, and affiliates
from any and all claims, debts, liabilities, demands, causes of action,
attorneys' fees, damages, or obligations of every kind and nature, whether they
are known or unknown, arising at any time prior to the date I sign this
Agreement. This general release includes, but is not limited to: all federal and
state statutory and common law claims, claims related to my employment or the
termination of my employment or related to breach of contract, tort, wrongful
termination, discrimination, wages or benefits, or claims for any form of
compensation. This release is not intended to release any
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claims I have or may have against any of the released parties for (a)
indemnification as a director, officer, agent or employee under applicable law,
charter document or agreement, (b) severance and other termination benefits
under my employment agreement and any related written documents, (c) health or
other insurance benefits based on claims already submitted or which are covered
claims properly submitted in the future, (d) vested rights under pension,
retirement or other benefit plans, or (e) in respect of events, acts or
omissions occurring after the date of this Release Agreement.
In releasing claims unknown to me at present, I am waiving all rights and
benefits under Section 1542 of the California Civil Code, and any law or legal
principle of similar effect in any jurisdiction:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the federal Age Discrimination in Employment Act of
1967, as amended ("ADEA"). I also acknowledge that the consideration given for
the waiver in the above paragraph is in addition to anything of value to which I
was already entitled. I have been advised by this writing, as required by the
ADEA that: (a) my waiver and release do not apply to any claims that may arise
after my signing of this Agreement; (b) I should consult with an attorney prior
to executing this release, (c) I have twenty-one (21) days within which to
consider this release (although I may choose to voluntarily execute this release
earlier); (d) I have seven (7) days following the execution of this release to
revoke the Agreement; (e) this Agreement will not be effective until the eighth
day after this Agreement has been signed both by me and by ARC
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("Effective Date"); and I will not be paid any of the Severance Benefits until
this Agreement has become effective.
This Agreement constitutes the complete, final and exclusive embodiment of
the entire agreement between ARC and me with regard to the subject matter hereof
I am not relying on any promise or representation by ARC that is not expressly
stated herein. This Agreement may only be modified by a writing signed by both
me and a duly authorized officer of ARC. I accept and agree to the terms and
conditions stated above:
AMERICAN REPROGRAPHICS EXECUTIVE
COMPANY, a Delaware corporation
By: _________________________________
______________________________ Kumarakulasingam Suriyakumar
_________________________ Address:
________________________
Title: ___________________________ ________________________
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