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Exhibit 10.1
EMPLOYMENT AGREEMENT
BETWEEN
PIONEER-STANDARD ELECTRONICS, INC.
AND
JAMES L. BAYMAN
July 29, 1997
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Table of Contents
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Page
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Employment................................................................1
Period of Employment......................................................1
Position, Duties, Responsibilities........................................1
Compensation, Compensation Plans, Perquisites............................2
Employee Benefit Plans....................................................4
Effect of Death or Disability.............................................4
Termination...............................................................5
General..........................................................5
Change of Control................................................6
For Cause or Voluntary Termination...............................7
Without Cause....................................................7
Arbitration......................................................8
Competition...............................................................8
Confidential Information..................................................8
Noninterference...........................................................9
Remedy .................................................................9
Withholding...............................................................9
Notices..................................................................10
General Provisions.......................................................10
Amendment or Modification; Waiver........................................11
Severability.............................................................11
Successors to the Company................................................11
Operation of Agreement...................................................12
Enforcement Costs........................................................12
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT between PIONEER-STANDARD ELECTRONICS,
INC., an Ohio corporation (the "Company"), and JAMES L. BAYMAN ("Bayman"), dated
July 29, 1997, to be effective April 1, 1997.
W I T N E S S E T H:
WHEREAS: The Company and Bayman have given consideration to an
employment agreement providing for the services of Bayman as Chairman and Chief
Executive Officer; and
WHEREAS: This Agreement is deemed necessary at the present
time to meet the need for a continued strong management without substantial
change; and
WHEREAS: Together with other officers of the Company, Bayman
has been responsible for the success of the business of the Company;
NOW, THEREFORE, it is hereby agreed by and between the Company
and Bayman as follows:
1. Employment
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The Company hereby agrees to continue to employ Bayman, and
Bayman hereby agrees to remain in the employ of the Company, for the
period set forth in Section 2 below (the "Period of Employment"), in
the position and with the duties and responsibilities set forth in
Section 3 below, and upon the other terms and conditions hereinafter
stated.
2. Period of Employment
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For the purposes of this Agreement, the Period of Employment,
subject only to the provisions of Section 6 below (relating to Death or
Disability), shall continue for a one-year period from the effective
date hereof and thereafter (i) subject to termination of this Agreement
by the Company effective as of the next anniversary of the effective
date hereof following written notice of termination, which notice must
be given to Bayman no later than February 1 of the Company's then
current fiscal year, or (ii) until the earlier termination of
employment as set forth in Section 7.
3. Position, Duties, Responsibilities
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3.01 During the Period of Employment, Bayman shall serve as Chairman
and Chief Executive Officer of the Company and shall have the
responsibility for all of the operations of the Company including the
authority, power and duties with regard to his
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position as may from time to time be assigned by the Board of Directors
of the Company. Bayman's duties will include the supervision and
direction of the corporate professional staff and the strategic
direction of the Company's operations. He shall at all times during
such period have the authority, power and duties of the person charged
with the general management of the business and affairs of the areas
assigned to him with authority to manage and direct all operations and
affairs of those areas and to employ and discharge all employees
thereof, reporting and being responsible only to the Board of Directors
of the Company.
3.02 It is further contemplated that at all times during the Period of
Employment Bayman shall serve and continue to serve as a member of its
Board of Directors. In the event that Bayman's employment is terminated
for any reason as provided in paragraph 7 below, Bayman agrees that he
shall immediately submit his written resignation as a member of the
Board of Directors of the Company, which may choose to either accept or
reject such resignation.
3.03 Throughout the Period of Employment Bayman shall devote his full
time and undivided attention during normal business hours to the
business and affairs of the Company, except for reasonable vacations
afforded the Company's executive officers and except for illness or
incapacity, but nothing in this Agreement shall preclude Bayman from
devoting reasonable time required for serving as a director or member
of an advisory committee of any organization involving no conflict of
interest with the interests of the Company, from engaging in charitable
and community activities, and from managing his personal investments,
provided that such activities do not materially interfere with the
regular performance of his duties and responsibilities under this
Agreement.
3.04 Bayman's office shall be located at the corporate offices of the
Company, and Bayman shall not be required to locate his office
elsewhere without his prior written consent, nor shall he be required
to be absent therefrom on travel status or otherwise more than a total
of sixty (60) days in any calendar year nor more than fifteen (15)
consecutive days at any one time.
4. Compensation, Compensation Plans, Perquisites
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4.01 (a) For all services rendered by Bayman in any capacity during the
Period of Employment, including without limitation, services as an
executive officer, director or member of any committee of the Company
or of any subsidiary, division or affiliate thereof, Bayman shall be
paid as compensation:
(i) A base salary, payable not less often than
monthly, at the rate of $25,000 per month,
with such increases in such rate as may be
awarded from time to time by the Board of
Directors of the Company;
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(ii) A cash incentive compensation payment equal to the
product of 8/10 of 1% of the sum of the "actual
operating income" of the Company, multiplied by the
ratio of the Company's "actual return on capital" to
20.4%. The term "actual operating income" shall be
defined as the income before income tax (state and
federal income tax) and interest expense. The term
"actual return on capital" shall be defined as the
Company's "actual operating income" divided by the
sum of its interest-bearing debt, plus equity (the
denominator shall be calculated for each fiscal year
as the average of such amounts as at the end of each
of the Company's four (4) fiscal quarters). All
amounts used to calculate the incentive compensation
payment shall reflect the operations of the Company
and its consolidated subsidiaries and affiliates and
shall be calculated in conformity with generally
accepted accounting principles. The Company shall
calculate the incentive compensation payment for each
fiscal year on a quarterly basis and shall pay Bayman
the incentive compensation amount based on such
quarterly calculation at the end of each of the first
three (3) fiscal quarters. After April 1 and before
June 16 of the next fiscal year, and after audited
financial statements are available to the Company,
the Company shall pay Bayman the balance of any
amount due Bayman based on the calculation of the
incentive compensation amount for the fiscal year
less payments made for the first three (3) fiscal
quarters, which payment shall be vested in the event
of termination by reason of Death or disability
(Section 6), Change of Control, (Section 7.02), or
without Cause (Section 7.04), but shall be forfeited
in the event of termination for Cause or voluntary
termination (Section 7.03).
(b) Any increase in salary, incentive compensation or other
form of compensation shall in no way diminish any other
obligation of the Company under this Agreement, unless
specifically agreed to in writing by Bayman.
4.02 During the Period of Employment Bayman shall be and continue to be
a full participant in the Company's Employees' Profit Sharing Plan or
any equivalent successor plan that may be adopted by the Company.
4.03 During the Period of Employment Bayman shall be entitled to
perquisites, including without limitation, an office, secretarial staff
and clerical staff, and to fringe benefits comparable to those enjoyed
by the other executive officers of the Company, as well as to
reimbursement, upon proper accounting, of reasonable business expenses
and disbursements incurred by him in the course of his duties.
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5. Employee Benefit Plans
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5.01 The compensation, together with other matters provided for in
Section 4 above, is in addition to the benefits provided for in this
Section 5.
5.02 Bayman, his dependents, beneficiaries and estate shall be entitled
to all payments and benefits and service credit for benefits during the
Period of Employment to which other executive officers of the Company,
their dependents and beneficiaries are entitled as the result of the
employment of such executive officers during the Period of Employment
under the terms of employee plans and practices of the Company,
including, without limitation, the Company's retirement program
consisting of its Employees' Profit Sharing Plan, its group life
insurance plan, its accidental death and dismemberment insurance,
disability, medical and health and welfare plans, any key person
individual life and disability policies, automobile expense
reimbursement, club membership fees and dues, and other present or
equivalent successor plans and practices of the Company, its
subsidiaries and divisions, for which other executive officers, their
dependents and beneficiaries are eligible, and to all payments or other
benefits under any such plan or practice after the Period of Employment
as a result of participation in such plan or practice during the Period
of Employment.
5.03 Bayman shall be eligible to participate in the Company's 1991
Stock Option Plan (which, together with any successor stock option plan
or plans that may be adopted by the Company, is referred to herein as
the "Option Plan"); provided, however, that the grant of any stock
options ("Options") under any Option Plan shall be at the sole
discretion of the Compensation Committee of the Board of Directors of
the Company. The Company has granted Bayman stock options at an option
price equal to the fair market value of the Company's Common Shares at
the date of grant. The terms and conditions of exercise of Options
shall be as is set forth in Bayman's Stock Option Agreements (the
"Option Agreements") with the Company; provided, however, that in the
event of a Change in Control, as defined in paragraph 18.02 below, then
notwithstanding the provisions of said Option Agreements, all options
(including those granted to him under the 1982 Incentive Stock Option
Plan and the 1991 Stock Option Plan) shall immediately be 100% vested
and Bayman shall have the immediate right of exercise with respect to
all Options and the underlying Common Shares covered by said Option
Agreements. In the event that Bayman's employment is terminated as a
result of a Change in Control, as defined in paragraph 18.02 below,
Bayman shall have the period of one (1) year after the date of such
termination to exercise his Options or the remainder of the term of
such Options, whichever is shorter, and any such exercise shall be
irrevocable.
6. Effect of Death or Disability
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6.01 In the event of the death of Bayman during the Period of
Employment, the Period of Employment shall be deemed to have ended as
of the close of business on the last day of the month in which death
shall have occurred, and his legal representative shall be entitled to
(i) the compensation provided for in paragraph 4.01(a)(i) above for the
month
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in which death shall take place at the rate being paid at the time of
death, (ii) any incentive compensation payable for the fiscal quarter
in which the Period of Employment shall be deemed to have terminated
due to death, plus the balance of any incentive compensation due Bayman
for any prior fiscal quarters in accordance with, and payable at the
times set forth in, paragraph 4.01(a)(ii) above, and (iii) any benefits
provided pursuant to paragraph 5.02 hereof which are payable pursuant
to the terms of the applicable plan or practice.
6.02 (a) The term "Disability," as used in this Agreement, shall mean
an illness or accident which prevents Bayman from performing his duties
under this Agreement for a period of six (6) consecutive months. The
Period of Employment shall be deemed to have ended as of the close of
business on the last day of such six (6) month period but without
prejudice to any payments due Bayman during such six (6) month period
or pursuant to any disability insurance policy.
(b) In the event of the Disability of Bayman during the Period
of Employment, Bayman shall be entitled to (i) the
compensation provided for in paragraph 4.01(a)(i) above, at
the rate being paid at the time of the commencement of
Disability, for the period of such Disability but not in
excess of six (6) months, (ii) any incentive compensation
payable for the fiscal quarter in which the Period of
Employment shall be deemed to have terminated due to
Disability, plus the balance of any incentive compensation due
Bayman for any prior fiscal quarters in accordance with, and
payable at the times set forth in, paragraph 4.01(a)(ii)
above, and (iii) any benefits provided pursuant to paragraph
5.02 hereof which are payable pursuant to the terms of the
applicable plan or practice.
(c) The amount of any payments due under this paragraph 6.02
shall be reduced by any payments to which Bayman may be paid
for the same period under any disability plan of the Company
or of any subsidiary or affiliate thereof.
7. Termination
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7.01 GENERAL. The Company may terminate Bayman with or without cause at
any time during the Period of Employment, subject to the provisions of
this Section 7. The termination of this Agreement by the Company
pursuant to Section 2(i) hereof shall be deemed to be a termination of
employment without Cause as set forth in Section 7.04 hereof. In the
event that this Agreement is to be terminated pursuant to Section 2(i)
hereof, upon receipt of the notice of termination Bayman shall have the
option of either leaving the Company at any time thereafter or
continuing his employment until the March 31 effective date of the
termination of this Agreement, and in either event Bayman shall be
entitled to receive all of the payments and benefits as provided in
Section 7.04 hereof; provided, however, that in the event Bayman elects
to continue his employment with the Company subsequent to the March 31
effective date of the termination of this Agreement, for a period of
three (3) months thereafter Bayman shall have the right to terminate
his
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employment with the Company and any such termination shall be deemed to
be a termination of employment without Cause as set forth above.
7.02 CHANGE OF CONTROL. Within one (1) year of a Change of Control of
the Company, as defined in paragraph 18.02, Bayman shall have the right
to terminate his employment with the Company and there shall be paid or
provided to Bayman, his dependents, beneficiaries and estate, as
liquidated damages or severance pay, or both, the following:
(a) The compensation provided for in paragraph 4.01(a)(i)
above for the month in which termination shall have occurred
at the rate being paid at the time of termination; and an
amount equal to his previous twenty four (24) months of base
salary plus an amount equal to the earned incentive cash bonus
referred to in paragraph 4.01(a)(ii) above for the two (2)
previously completed fiscal years. Such amount shall be paid
to Bayman in one payment, immediately upon termination. Bayman
shall also receive any incentive compensation payable for the
fiscal quarter in which the Period of Employment shall be
deemed to have terminated due to Change of Control, plus the
balance of any incentive compensation due Bayman for any prior
fiscal quarters in accordance with, and payable at the times
set forth in, paragraph 4.01(a)(ii) above.
(b) For two (2) years following the date of termination,
Bayman, his dependents, beneficiaries and estate, shall
continue to be entitled to all benefits provided pursuant to
paragraph 5.02 hereof which are payable pursuant to the terms
of the applicable plan or practice, and service credit for
benefits under all employee benefit plans of the Company,
including, without limitation, the Company's Profit Sharing
Plan referred to in paragraph 5.02 above, upon the same basis
as immediately prior to termination and, to the extent that
such benefits or service credit for benefits shall not be
payable or provided under any such plans to Bayman, his
dependents, beneficiaries and estate, by reason of his no
longer being an employee of the Company as the result of
termination, or any such plan, program or arrangement is
discontinued or the benefits thereunder are materially
reduced, the Company shall itself arrange to provide to
Bayman, his dependents, beneficiaries and estate benefits
substantially similar to those which Bayman, his dependents
and beneficiaries were entitled to receive under such plans,
programs and arrangements immediately prior to termination.
Any termination by the Company within the period of one
hundred eighty (180) days prior to the execution of a letter of intent
or a definitive agreement which could lead to a Change of Control and
the closing of the transaction actually resulting in the Change of
Control, as defined in paragraph 18.02, shall be deemed to be a
termination under this paragraph 7.02. An election by Bayman to
terminate his employment under the provisions of this paragraph 7.02
shall not be deemed a voluntary termination of employment by Bayman
under paragraph 7.03 of this Agreement or any plan or practice of the
Company.
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7.03 FOR CAUSE OR VOLUNTARY TERMINATION. For the purpose of any
provision of this Agreement, the termination of Bayman's employment
shall be deemed to have been for Cause only if:
(a) termination of his employment shall have been the result
of Bayman's conviction of any of the following: (i)
embezzlement; (ii) misappropriation of money or other property
of the Company; or (iii) any felony; or
(b) there has been a breach by Bayman during the Period of
Employment of the provisions of paragraph 3.03 above, relating
to devotion of full time to the affairs of the Company,
Section 8 relating to Competition, Section 9 relating to
Confidential Information, or Section 10 relating to
Noninterference, and such breach results in demonstrable
significant injury to the Company, and with respect to any
alleged breach of paragraph 3.03 hereof, Bayman shall have
failed to remedy such breach within thirty (30) days from his
receipt of written notice from the Company.
If Bayman's employment is terminated by the Company for Cause,
or if Bayman shall voluntarily terminate his employment with the
Company, Bayman shall be entitled to the compensation provided for in
paragraph 4.01(a)(i) through the date of such termination. Bayman shall
not be entitled to any additional compensation or benefits (except for
any vested benefits), and shall continue to be bound by the provisions
of Section 8 of this Agreement (relating to Competition), the
provisions of Section 9 of this Agreement (relating to Confidential
Information), and the provisions of Section 10 (relating to
Noninterference).
7.04 WITHOUT CAUSE. Subject to compliance by Bayman with the provisions
of Section 8 of this Agreement (relating to Competition), the
provisions of Section 9 of this Agreement (relating to Confidential
Information), and the provisions of Section 10 of this Agreement
(relating to Noninterference), if the Company shall terminate Bayman's
employment, without Cause, there shall be paid or provided to Bayman,
his dependents, beneficiaries and estate, as liquidated damages or
severance pay, or both, (i) the compensation provided for in paragraph
4.01(a)(i) above for the month in which termination shall have occurred
at the rate being paid at the time of such termination, and (ii) the
amount (the "Payment Amount") per month equal to 1/24th of (A) the
total of his previous twenty-four (24) months of base salary plus (B)
an amount equal to the earned incentive cash bonus referred to in
paragraph 4.01(a)(ii) above for the two (2) previously completed fiscal
years. Such Payment Amount shall be paid to Bayman or, in case of his
prior death, to his legal representative or estate, in monthly
installments at the end of each month commencing with the month next
following that in which such termination shall have occurred, and
continuing for a period of twenty-four (24) months. Bayman shall also
receive any incentive compensation payable for the fiscal quarter in
which the Period of Employment shall be deemed to have been terminated
without Cause, plus the balance of any incentive compensation due
Bayman for any prior fiscal quarters in accordance with, and payable at
the times set forth in, paragraph 4.01(a)(ii) above, plus any benefits
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provided pursuant to paragraph 5.02 hereof which are payable pursuant
to the terms of the applicable plan or practice. In the event the
Company fails to make such payments when due, then the remaining
payments shall become due and payable immediately.
7.05 ARBITRATION. In the event that Bayman's employment shall be
terminated by the Company during the Period of Employment or the
Company shall withhold payments or provision of benefits because Bayman
is alleged to be engaged in activities prohibited by Sections 8, 9 or
10 of this Agreement or for any other reason, Bayman shall have the
right, in addition to all other rights and remedies provided by law, at
his election either to seek arbitration in the metropolitan area of
Cleveland, Ohio, under the rules of the American Arbitration
Association by serving a notice to arbitrate upon the Company or to
institute a judicial proceeding, in either case within one hundred and
twenty (120) days after having received notice of termination of his
employment.
8. Competition
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There shall be no obligation on the part of the Company to
make any further payments provided for in paragraph 7.04 above if
Bayman shall, during the two (2) years following termination of
Bayman's employment for any reason except Change of Control as
described in paragraph 7.02, engage in Competition with the Company as
hereinafter defined. The word "Competition" for purposes of this
Section 8 and any other provision of this Agreement shall mean taking
any employment or consulting position with or control of one of the
Company's top twenty-five (25) competitors as listed in the most
current issue at the date of termination of Electronic Buyer's News
and/or Electronic News; provided, however, that in no event shall
ownership of less than 5% of the outstanding capital stock entitled to
vote for the election of directors of a corporation with a class of
equity securities held of record by more than 500 persons be deemed
Competition with the Company within the meaning of this Section 8.
9. Confidential Information
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9.01 Except for information which is already in the public domain, or
which is publicly disclosed by persons other than Bayman, or which is
required by law or court order to be disclosed, or information given to
Bayman by a third party not bound by any obligation of confidentiality,
Bayman shall at all times during and after his employment with the
Company hold in strictest confidence any and all confidential
information within his knowledge and which is material to the business
of the Company (whether acquired prior to or during his employment with
the Company) concerning the inventions, products, processes, methods of
distribution, customers, services, business, suppliers or trade secrets
of the Company, except that Bayman may, in connection with the
performance of his duties to the Company, divulge confidential
information to the directors, officers, employees and shareholders of
the Company and to the advisors, accountants, attorneys or lenders of
the Company or such other individuals as deemed prudent in the course
of business to carry out the responsibilities and duties of his
position. Such confidential information includes, without limitation,
financial information, sales information, price
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lists, marketing data, the identity and lists of actual and potential
customers and technical information, all to the extent that such
information is not intended by the Company for public dissemination.
9.02 Bayman also agrees that upon leaving the Company's employ he will
not take with him, without the prior written consent of an officer
authorized to act in the matter by the Board of Directors of the
Company, any Company document, contract, internal financial or
management reports, customers list, product list, price list, catalog,
employee list, procedures, software, MIS data, drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature relating to
the Company, its subsidiaries, affiliates and divisions, or, without
limitation, relating to its or their methods of purchase or
distribution, or any description of any trade secret, formulae or
secret processes.
10. Noninterference
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Except for Change of Control as described in paragraph 7.02,
Bayman shall not, at any time during or within two (2) years after his
employment is terminated with the Company, without the prior written
consent of the Company, directly or indirectly, induce or attempt to
induce any employee, agent or other representative or associate of the
Company to terminate his or her relationship with the Company, or in
any way directly or indirectly interfere with such a relationship or
any relationship between the Company and any of its top fifty (50)
suppliers or top two hundred fifty (250) customers, both in terms of
the Company's sales volume, provided that purchasing goods from a
supplier to the Company or making a sale to any of the Company's
customers shall not be deemed to be interference.
11. Remedy
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Bayman acknowledges that Sections 8, 9 and 10 hereof were
negotiated at arms length and are required for the fair and reasonable
protection of the Company. Bayman and the Company further acknowledge
and agree that a breach of those obligations and agreements will result
in irreparable and continuing damage to the Company for which there
will be no adequate remedy at law and, therefore, Bayman and the
Company agree that in the event of any breach of said obligations and
agreements the Company, and its successors and assigns, shall be
entitled to injunctive relief and such other and further relief,
including monetary damages, as is proper in the circumstances. It is
further agreed that the running of the periods provided above in
Sections 8 and 10, shall be tolled during any period which Bayman shall
be adjudged to have been in violation of any of his obligations under
such Sections.
12. Withholding
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Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to Bayman or his estate or
beneficiaries, shall be subject to the
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withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation. In lieu of withholding
such amounts, the Company may accept other provisions to the end that
it has sufficient funds to pay all taxes required by law to be withheld
in respect of such payments or any of them.
13. Notices
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All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
sufficiently given if and when mailed in the continental United States
by registered or certified mail or personally delivered to the party
entitled thereto at the address stated below or to such changed address
as the addressee may have given by a similar notice:
To the Company: Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105
Attention:
Secretary or Assistant Secretary
To Bayman: James L. Bayman
2749 Cranlyn Road
Shaker Heights, Ohio 44122
14. General Provisions
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14.01 There shall be no right of set-off or counter claim, in respect
of any claim, debt or obligation, against payments to Bayman, his
dependents, beneficiaries or estate provided for in this Agreement.
14.02 No right or interest to or in any payments shall be assignable by
Bayman; provided, however, that this provision shall not preclude him
from designating one or more beneficiaries to receive any amount that
may be payable after his death and shall not preclude the legal
representative of his estate from assigning any right hereunder to the
person or persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the laws of
intestacy applicable to his estate. The term "beneficiaries" as used in
this Agreement shall mean a beneficiary or beneficiaries so designated
to receive any such amount or, if no beneficiary has been so
designated, the legal representative of Bayman's estate.
14.03 No right, benefit or interest hereunder, shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge,
pledge, hypothecation, or set-off in respect of any claim, debt or
obligation, or to execution, attachment, levy or similar process, or
assignment by operation of law. Any attempt, voluntary or involuntary,
to effect any
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action specified in the immediately preceding sentence shall, to the
full extent permitted by law, be null, void and of no effect.
14.04 In the event of Bayman's death or a judicial determination of his
incompetence, reference in this Agreement to Bayman shall be deemed,
where appropriate, to refer to his legal representative or, where
appropriate, to his beneficiary or beneficiaries.
14.05 The titles to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by
reference to the title of any section.
14.06 This Agreement shall be binding upon and shall inure to the
benefit of (a) Bayman and, subject to the provisions of paragraphs
14.02 and 14.03, his heirs and legal representatives, and (b) the
Company and its successors as provided in Section 17 hereof.
15. Amendment or Modification; Waiver
-----------------------------------
No provision of this Agreement may be amended or waived unless
such amendment or waiver is authorized by the Board of Directors of the
Company or the Compensation Committee thereof and is agreed to in
writing, signed by Bayman and by an officer of the Company thereunto
duly authorized by either the Board of Directors or the Compensation
Committee. Except as otherwise specifically provided in this Agreement,
no waiver by either party hereto of any breach by the other party
hereto of any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of a subsequent breach of
such condition or provision or a waiver of a similar or dissimilar
provision or condition at the same or at any prior or subsequent time.
16. Severability
---------------------
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
17. Successors to the Company
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Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the Company and any
successor of the Company, including, without limitation, any
corporation which acquires directly or indirectly all or substantially
all of the assets or capital stock of the Company whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter
be deemed the Company for the purposes of this Agreement), but shall
not otherwise be assignable by the Company.
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18. Operation of Agreement
----------------------
18.01 This Agreement is effective April 1, 1997, and shall supersede
any prior employment arrangement or agreement, including the Amended
and Restated Employment Agreement dated June 12, 1995, which was
effective April 3, 1995, and the Employment Agreement dated May 7,
1996, which was effective April 1, 1996 between Bayman and the Company,
which shall be deemed to be terminated and null and void except for any
vested rights to receive compensation under Section 4.01(a)(ii)
thereof.
18.02 For the purpose of this Agreement, the term "Change in Control"
of the Company shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 as
in effect on the date of this Agreement; provided that, without
limitation, such a change in control shall be deemed to have occurred
if and when (a) any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes a
beneficial owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's
then outstanding securities, or (b) during any period of twelve (12)
consecutive months, commencing before or after the date of this
Agreement, individuals who, at the beginning of such twelve (12) month
period were directors of the Company for whom Bayman, as a shareholder,
shall have voted, cease for any reason to constitute at least a
majority of the Board of Directors of the Company.
19. Enforcement Costs
-----------------
The Company is aware that upon the occurrence of a Change in
Control the Board of Directors or a shareholder of the Company may then
cause or attempt to cause the Company to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause the
Company to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take, or attempt to take,
other action to deny Bayman the benefits intended under this Agreement.
In these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that Bayman not be required
to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the
cost and expense thereof would substantially detract from the benefits
intended to be extended to Bayman hereunder, nor be bound to negotiate
any settlement of his rights hereunder under threat of incurring such
expenses. Accordingly, if following a Change in Control it should
appear to Bayman that the Company has failed to comply with any of its
obligations under this Agreement or in the event that the Company or
any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from, Bayman, the benefits
intended to be provided to Bayman hereunder, and that Bayman has
complied with all of his obligations under this Agreement, the Company
irrevocably authorizes Bayman from time to time to retain counsel of
his choice at the expense of the Company as provided in this Section
19, to represent Bayman in connection with the initiation or defense of
any litigation or other
15
legal action, whether by or against the Company or any Director,
officer, shareholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company
irrevocably consents to Bayman entering into an attorney-client
relationship with such counsel, and in that connection the Company and
Bayman agree that a confidential relationship shall exist between
Bayman and such counsel. The reasonable fees and expenses of counsel
selected from time to time by Bayman as hereinabove provided shall be
paid or reimbursed to Bayman by the Company on a regular, periodic
basis upon presentation by Bayman of a statement or statements prepared
by such counsel in accordance with its customary practices, up to a
maximum aggregate amount of $500,000.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: PIONEER-STANDARD ELECTRONICS, INC.
/s/ Diana Lindsay /s/ Vic Gelb
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Vic Gelb, Chairman of the Compensation
Committee
ATTEST:
/s/ Carol J. Torre /s/ James L. Bayman
- ------------------------------ ---------------------------------------
James L. Bayman