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Exhibit 10.03
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of January 1, 1994, between Gerald W.
Medlin, an individual residing at 7681 Dunsinane Drive, Dublin, Ohio 43017
("Employee"), and Cardinal Distribution, Inc. an Ohio corporation (the
"Company" or "Cardinal").
IN CONSIDERATION of the mutual covenants and promises herein
contained, Employee and the Company hereby agree as follows:
1. For the period commencing as of the date first set forth
above (the "Effective Date") and continuing for a period ending on the fifth
anniversary of the Effective Date (the "Employment Term"), the Company shall
employ Employee, and Employee shall work for the Company in a managerial
capacity and shall perform such duties as shall be determined from time to time
by the Company's Chairman or President. While employed hereunder, Employee
shall devote his full business time, effort, skill and attention to the
Company's affairs (excepting periods when Employee acts as an advisor to family
businesses or affairs, so long as such activities do not interfere with the
performance of his duties hereunder, and periods of vacation, illness, leave of
absence or Disability (as defined below)).
2. During the Employment Term, the Company shall pay Employee
as base salary the amount of $151,000 per annum, such amount to be payable in
accordance with the Company's standard practices in the payment of salaries to
its salaried employees. Employee shall be eligible to receive annual increases
to his base salary in accordance with the general practices of the Company
applicable to its management personnel. Employee shall also be eligible to
receive the following benefits:
(i) Employee shall be eligible to receive annual incentive
bonuses for the fiscal years ending during the Employment
Term, to be determined and payable at the discretion of the
Company's Board of Directors and in accordance with
performance criteria generally applicable to Cardinal's
other management personnel; with an annualized target bonus
of at least 38% of his base salary, which for the fiscal
year ended March 31, 1994 ("Fiscal 1994"), is calculated to
be $57,380;
(ii) Employee shall be eligible for the grant of stock options
in accordance with the standard practice for Cardinal
management personnel pursuant to Cardinal's Stock Incentive
Plan;
(iii) Employee shall be eligible to participate in the Company's
group health, life, disability, profit sharing and other
employee benefit plans generally
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offered to the Company's employees in accordance with the
standard terms and conditions of such plans from
time-to-time;
(iv) Employee shall be eligible to receive the number of paid
vacation days in each calendar year granted from time to
time to Cardinal's other management personnel. Employee
shall also be eligible to receive all paid holidays given
by Cardinal to its other management personnel. The
vacation and holiday benefits hereunder shall not be
cumulative;
(v) During the Employment Term, the Company shall, upon
Employee's submission of proper supporting documentation,
promptly reimburse Employee for all items of travel,
entertainment, and miscellaneous expenses reasonably
incurred by Employee on behalf of the Company or any
Company Affiliates (as defined in paragraph 3) and which
meet Cardinal's then-standard criteria for reimbursing
expenses; and
(vi) During the Employment Term, the Company shall pay Employee
an annualized car allowance of not less than $5,500
payable in monthly equal installments.
3. From and after the date hereof, Employee shall not
disclose to any person, association, firm, corporation or other entity (other
than Cardinal or any subsidiary of Cardinal ("Company Affiliates") or in the
routine performance of his duties as an employee of Cardinal), in any manner,
directly or indirectly, any confidential or proprietary information or data of
the Company or any Company Affiliates whether of a technical or commercial
nature, or use or assist any person, association, firm, corporation or other
entity (other than the Company or any Company Affiliates) to use, in any
manner, directly or indirectly, any such information or data, excepting only
use of such data or information (i) as is required by applicable law or (ii) as
is at the time generally known to the public and which did not become generally
known through the breach of any provision of paragraphs 3, 4, 5 or 6 hereof by
Employee.
4. During the Employment Term and any additional period he is
employed by the Company or any Company Affiliate (whether pursuant to an
express or implied contract or as an employee at will), Employee shall not,
directly or indirectly, whether as an individual on his own account, or as a
shareholder, partner, joint venturer, director, officer, employee, consultant,
creditor and/or agent or otherwise:
(a) Enter into, accept employment with, or otherwise engage in
any business which competes with the business and
activities carried on by the Company or any Company
Affiliates during such period (the "Business");
(b) Solicit customers or business patronage which results in
competition with the Business; or
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(c) Promote or assist, financially or otherwise, any person,
firm, association, corporation or other entity engaged in
any business which competes with the Business; provided,
however, that the foregoing covenant shall not be deemed
to have been violated solely by the ownership of shares of
any class of capital stock of any publicly traded
corporation so long as the aggregate holdings of Employee
represent less than 1% of such corporation's outstanding
capital stock.
(d) The Company shall have the right to elect to have the
foregoing provisions of paragraph 4 apply for an
additional period (the "Extension Period") beginning on
the later of (i) the day the Employee's employment with
the Company terminates, and (ii) the first day after the
end of the Employment Term, and ending on the earlier of
(x) the first anniversary of the first day of the
Extension Period, and (y) the death of the Employee. The
election to extend for the Extension Period shall be made
by giving Employee notice of such election within 30 days
after the later of (A) the expiration of the Employment
Term, and (B) the actual termination of Employee's
employment with the Company. If the Company elects to
exercise the Extension Period, then the Company shall be
obligated to continue to pay Employee his base salary in
effect as of the date immediately preceding the beginning
date of the Extension Period.
Notwithstanding the foregoing if, as a result of, or in
connection with, any cash tender offer, exchange offer, merger, or other
business combination, sale of assets or contested election, or combination of
the foregoing (collectively, a "Change in Control"), the persons who were
directors of the Company immediately prior to the Change in Control shall cease
to constitute a majority of the Board of Directors of the Company, then
Employee's obligations under this paragraph 4 shall terminate immediately
(rather than one year after or otherwise) the termination of his employment
with the Company.
As additional compensation for Employee's covenants
contained in this paragraph 4, Employee shall receive a grant of 1,800
restricted shares under Cardinal's Stock Incentive Plan on or about March 1,
1994, contingent upon Employee"s continued employment with the Company through
that date. These restricted shares will vest in equal annual increments of
one-third each on the third, fourth and fifth anniversaries of the grant date;
provided, however, that if Employee's employment is terminated Without Cause by
Cardinal (as defined in paragraph 9, below) prior to the fifth anniversary of
the grant date, then Cardinal shall (at its option) either (i) accelerate the
vesting on any unvested portion of the 1,800 share grant and the 4,375 share
grant previously made to Employee on May 15, 1991 (collectively, the "Eligible
Restricted Shares"), or (ii) pay Employee the equivalent cash value of the
unvested Eligible Restricted Shares, valued as of the date Employee's
employment with Cardinal is so terminated.
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5. During the Employment Term and any additional period he is
employed by the Company or any Company Affiliate and continuing through the end
of the Extension Period, Employee agrees that he shall not take any action
which would interfere with contractual relationships of the Company or any
Company Affiliates with customers, suppliers, employees or others, any action
which disparages or diminishes the reputation of the Company or any Company
Affiliates, or any action which diverts customers of the Company or any Company
Affiliates. It is understood that acts taken by Employee during the Employment
Term in the good faith performance of his duties as specified in this Agreement
shall not provide the Company with any claim under this paragraph 5.
6. Employee understands that in the Company's view it is
essential to the successful operation of the business of the Company and any
Company Affiliates that the Company and any Company Affiliates retain
substantially unimpaired (to an extent determined by the Company in its sole
discretion) the Company's and any Company Affiliate's operating organization.
Employee agrees that he shall not, without the prior written consent of the
Company, whether directly or indirectly, employ, whether as an employee,
officer, director, agent, consultant or independent contractor, or solicit the
employment of, any person who was or is at any time during the previous 12
months an employee, representative, officer or director of the Company or any
Company Affiliate.
7. Employee acknowledges and agrees that the Company's remedy
at law for any breach of any of Employee's obligations under paragraphs 3, 4, 5
or 6 hereof would be inadequate and agrees and consents that temporary and
permanent injunctive relief may be granted in any proceeding which may be
brought to enforce any provision of paragraphs 3, 4, 5 or 6 (without the
necessity of proof of actual damage).
8. With respect to any provision of this Agreement finally
determined by a court of competent jurisdiction to be unenforceable, Employee
and the Company hereby agree that such court shall have jurisdiction to reform
this Agreement or any provision thereof so that it is enforceable to the
maximum extent permitted by law, and the parties agree to abide by such court's
determination. If any provision of this Agreement cannot be reformed, such
provision shall be deemed to be severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
9. (a) Notwithstanding anything herein to the contrary, this
Agreement shall terminate and no payment of any compensation shall be made to
Employee except for services previously rendered to the Company by Employee and
for such other employee benefits in which Employee has a vested interest, in
the following events:
(i) If Employee has engaged in fraud, embezzlement, willful
misconduct or is involved in conduct which violates
(excluding immaterial violations of) Cardinal's Standards
of Business Conduct-Statement of Policy applicable to
Cardinal management personnel; and
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(ii) Upon Employee's death or Disability. "Disability" shall
mean the incapacity of Employee, due to physical or mental
illness or other physical disability, to perform his
duties hereunder, where a physician selected by agreement
of Employee and the Company is of the opinion that such
incapacity will continue for a period of at least 180
days; and
(iii) Employee quits or fails or refuses faithfully to perform
his duties for the Company when and to the extent
reasonably requested by the Company's Chairman or
President to do so and does not correct such failure
within thirty (30) days after notice to do so, it being
understood that this standard is intended to assure the
Company of the reasonable attendance, efforts and good
faith business attention of Employee to his duties on
behalf of the Company but may not be relied upon by the
Company to terminate Employee based upon the operating
performance of the Company.
(b) In addition, the Company may terminate this
Agreement for any cause or without cause, other than as specifically set forth
in paragraph 9(a)(referred to herein as "Without Cause"); provided, however,
that the Company shall in such circumstances be obligated to continue to pay
Employee his base salary for and during the unexpired portion of the Employment
Term. In the event of such termination, any amount received by Employee from
another employer after termination of Employee's employment pursuant to this
paragraph 9(b) shall reduce the amounts payable by the Company to him
hereunder.
10. This Agreement shall be binding on and inure to the
benefit of Employee, his heirs, executors, administrators, and other legal
representatives and shall be binding on and inure to the benefit of the
Company, Company Affiliates and their respective successors and assigns. The
failure of either party at any time or from time to time to require performance
of the other party's obligations under this Agreement shall in no manner affect
the right to enforce any provision of this Agreement at a subsequent time, and
the waiver of any rights arising out of any breach shall not be construed as a
waiver of any rights arising out of any subsequent or prior breach. The
covenants and agreements of Employee contained in paragraphs 3, 6, 7 and 8
shall survive and remain in full force and effect beyond the Employment Term.
Paragraphs 4 and 5 shall survive and remain in full force and effect until the
end of the Employment Term and any additional period Employee is employed by
the Company or any Company Affiliates, and during any Extension Period.
11. Whenever the context of this Agreement requires, words
used in the singular shall be construed to mean and include the plural and vice
versa, and pronouns of any gender shall be deemed to include and designate the
masculine, feminine, or neuter gender.
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12. No amendment, modification or waiver of any provision of
this Agreement, nor consent to any departure by Employee therefrom, shall be
effective unless the same shall be in writing and signed by the Company.
13. All notices, requests, demands and other communications
required or permitted under the Agreement shall be deemed to have been duly
given and made if in writing and served either by personal delivery to the
party for whom it is intended or one business day after having been dispatched
by a nationally recognized overnight courier service bearing the address shown
on the first page of this Agreement for, or such other address as may be
designated in writing hereafter by, such party.
14. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which taken together
shall be one and the same instrument.
15. This Agreement shall be governed by the laws of the State
of Ohio. In any lawsuit or other legal proceeding relating to this Agreement,
any court of competent jurisdiction situated in Franklin County, Ohio shall
have exclusive jurisdiction and venue relating to such suit or other legal
proceeding.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this instrument on the day first above written.
Signed in the presence of: EMPLOYEE
George H. Bennett, Jr. GERALD W. MEDLIN
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Sandra M. Stein GERALD W. MEDLIN
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CARDINAL DISTRIBUTION, INC.
George H. Bennett, Jr. J.C. Kane
- -------------------------------------- By: ------------------------------------
Sandra M. Stein 1/5/94
- -------------------------------------- By: ------------------------------------