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Exhibit 10.4
EMPLOYMENT AGREEMENT
BETWEEN
PIONEER-STANDARD ELECTRONICS, INC.
AND
JOHN V. GOODGER
July 29, 1997
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Table of Contents
Page
Employment........................................................................................................1
Period of Employment..............................................................................................1
Compensation, Compensation Plans, Perquisites....................................................................2
Employee Benefit Plans............................................................................................3
Effect of Death or Disability.....................................................................................4
Termination.......................................................................................................5
General..................................................................................................5
Change of Control........................................................................................5
For Cause or Voluntary Termination.......................................................................6
Without Cause............................................................................................7
Arbitration..............................................................................................7
Competition.......................................................................................................8
Confidential Information..........................................................................................8
Noninterference...................................................................................................9
Remedy............................................................................................................9
Withholding.......................................................................................................9
Notices...........................................................................................................9
General Provisions...............................................................................................10
Amendment or Modification; Waiver................................................................................11
Severability.....................................................................................................11
Successors to the Company........................................................................................11
Operation of Agreement...........................................................................................11
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 JOHN V. GOODGER ("Goodger"), dated July
29, 1997, to be effective April 1, 1997.
W I T N E S S E T H:
WHEREAS: The Company and Goodger have given consideration to an
employment agreement providing for the services of Goodger as Vice President,
Treasurer and Assistant Secretary; 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, Goodger has been
responsible for the success of the business of the Company;
NOW, THEREFORE, it is hereby agreed by and between the Company and
Goodger as follows:
1. Employment
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The Company hereby agrees to continue to employ Goodger, and
Goodger 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 on a year-to-year basis (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 Goodger 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, Goodger shall serve as Vice
President, Treasurer and Assistant Secretary of the Company reporting
to the Chief Executive Officer of the Company and shall have the
authority, power, and duties with regard to his
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position as may from time to time be assigned by the Chief Executive
Officer or the Board of Directors of the Company.
3.02 Throughout the Period of Employment Goodger 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 Goodger 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.
3.03 Goodger's office shall be located at the corporate offices of the
Company, and Goodger 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 Goodger in any capacity during
the Period of Employment, Goodger shall be paid as compensation:
(i) A base salary, payable not less often than
monthly, at the rate of $12,500 per month,
with such increases in such rate as may be
awarded from time to time by the Board of
Directors of the Company;
(ii) A cash incentive compensation payment equal
to the product of 15/100 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
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compensation payment for each fiscal year on
a quarterly basis and at the end of each of
the first three (3) fiscal quarters shall
pay Goodger the incentive compensation
amount based on such quarterly calculation.
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 Goodger the balance of any
amount due Goodger 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 Goodger.
4.02 During the Period of Employment Goodger 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 Goodger 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.
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 Goodger, 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
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practice after the Period of Employment as a result of participation in
such plan or practice during the Period of Employment.
5.03 Goodger 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 Goodger 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 Goodger's
Options shall be as is set forth in Goodger'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 Goodger 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 Goodger's employment is terminated
as a result of a Change in Control, as defined in paragraph 18.02
below, Goodger 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 Goodger 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 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 Goodger 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 Goodger from performing his
duties under this Agreement for a period of three (3) consecutive
months. The Period of Employment shall be deemed to have ended as of
the close of business on the last day of such three (3) month period
but without prejudice to any payments due Goodger during such three (3)
month period or pursuant to any disability insurance policy.
(b) In the event of the Disability of Goodger during the
Period of Employment, Goodger shall be entitled to (i) the
compensation provided for in
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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 three (3) 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 Goodger 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 Goodger 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 Goodger 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 Goodger 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 Goodger shall be
entitled to receive all of the payments and benefits as provided in
Section 7.04 hereof; provided, however, that in the event Goodger
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 Goodger shall have the right to
terminate his 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, Goodger shall have the
right to terminate his employment with the Company and there shall be
paid or provided to Goodger, 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 Goodger in one payment, immediately upon termination.
Goodger 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
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compensation due Goodger 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,
Goodger, 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 Goodger, 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
Goodger, his dependents, beneficiaries and estate benefits
substantially similar to those which Goodger, 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 Goodger to
terminate his employment under the provisions of this paragraph 7.02
shall not be deemed a voluntary termination of employment by Goodger
under paragraph 7.03 of this Agreement or any plan or practice of the
Company.
7.03 FOR CAUSE OR VOLUNTARY TERMINATION. For the purpose of any
provision of this Agreement, the termination of Goodger's employment
shall be deemed to have been for Cause only if:
(a) termination of his employment shall have been the result
of Goodger'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 Goodger 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, Goodger shall have
failed to remedy such breach within thirty (30) days from his
receipt of written notice from the Company.
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If Goodger's employment is terminated by the Company for
Cause, or if Goodger shall voluntarily terminate his employment with
the Company, Goodger shall be entitled to the compensation provided for
in paragraph 4.01(a)(i) through the date of such termination. Goodger
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 Goodger 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 Goodger's
employment, without Cause, there shall be paid or provided to Goodger,
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 Goodger 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 six (6) months. Goodger 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 Goodger 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 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 Goodger's employment shall be
terminated by the Company during the Period of Employment or the
Company shall withhold payments or provision of benefits because
Goodger is alleged to be engaged in activities prohibited by Sections
8, 9 or 10 of this Agreement or for any other reason, Goodger 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.
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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
Goodger shall, during the six (6) months following termination of
Goodger'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 Goodger, or which is
required by law or court order to be disclosed, or information given to
Goodger by a third party not bound by any obligation of
confidentiality, Goodger 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 Goodger 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 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 Goodger 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.
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10. Noninterference
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Except for Change of Control as described in paragraph 7.02,
Goodger shall not, at any time during or within six (6) months 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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Goodger 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. Goodger 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, Goodger 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 Goodger
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 Goodger or his estate
or beneficiaries, shall be subject to the 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:
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To the Company: Pioneer-Standard Electronics, Inc.
4800 East 131st Street
Cleveland, Ohio 44105
Attention: Secretary or Chief Executive
Officer [and President]
To Goodger: John V. Goodger
104 Manor Brook Drive
Chagrin Falls, Ohio 44022
14. General Provisions
------------------
14.01 There shall be no right of set-off or counter claim, in respect
of any claim, debt or obligation, against payments to Goodger, 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
Goodger; 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 Goodger'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 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 Goodger's death or a judicial determination of
his incompetence, reference in this Agreement to Goodger 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) Goodger 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.
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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 Goodger 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
-------------------------
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.
18. Operation of Agreement
-----------------------
18.01 This Agreement is effective as of 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 Goodger 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
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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
Goodger, 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 Goodger 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 Goodger 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 Goodger 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 Goodger 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, Goodger, the
benefits intended to be provided to Goodger hereunder, and that Goodger
has complied with all of his obligations under this Agreement, the
Company irrevocably authorizes Goodger from time to time to retain
counsel of his choice at the expense of the Company as provided in this
Section 19, to represent Goodger in connection with the initiation or
defense of any litigation or other 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 Goodger entering into
an attorney-client relationship with such counsel, and in that
connection the Company and Goodger agree that a confidential
relationship shall exist between Goodger and such counsel. The
reasonable fees and expenses of counsel selected from time to time by
Goodger as hereinabove provided shall be paid or reimbursed to Goodger
by the Company on a regular, periodic basis upon presentation by
Goodger of a statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum aggregate
amount of $500,000.
12
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: PIONEER-STANDARD ELECTRONICS, INC.
/s/ Colleen M. Simon By /s/ James L. Bayman
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James L. Bayman, Chairman and Chief
Executive Officer
ATTEST:
/s/ Carol J. Torre /s/ John V. Goodger
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John V. Goodger