EXHIBIT 10.30
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of October 10,
2002 between INSIGHT ENTERPRISES, INC., a Delaware corporation ("Company"), and
P. Robert Moya ("Executive").
RECITALS
Company wishes to hire Executive as its Executive Vice President, General
Counsel and Secretary pursuant to an employment agreement, the terms and
provisions of which are set forth below, and Executive wishes to accept such
position and employment.
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:
1. TERMS OF AGREEMENT
(a) Effective Date. This Agreement and Executive's term of employment shall
becomes effective on October 10, 2002.
(b) Initial Term. Executive shall be employed by Company for the duties set
forth in Section 2 for a three-year term, commencing as of October 10,
2002 and ending on October 9, 2005 (the "Term"), unless sooner
terminated in accordance with the provisions of this Agreement.
2. POSITION AND DUTIES
(a) Job Duties. Company does hereby employ, engage and hire Executive to
serve as Executive Vice President, General Counsel and Secretary and
Executive does hereby accept and agree to such employment, engagement,
and hiring. Executive's duties and authority during the Employment
Period shall be such executive duties as the Company's Board of
Directors (the "Board") or Chief Executive Officer (the "CEO") shall
reasonably determine from time to time. Employee will report to the
CEO. Except as provided in the next sentence, Executive will devote
substantially all of his working time and effort to his duties on
behalf of Company, reasonable absences because of illness, vacation,
and personal and family exigencies excepted. The parties understand
that Executive will have certain responsibilities in connection with
the winding up of his private law practice, some of which may require
Executive's attention up to two days at a time, and some of which may
require out-of-town travel. Notwithstanding such responsibilities,
Executive will fulfill his responsibilities for Company in a timely and
diligent manner, and it is anticipated that his law-practice
responsibilities will require a reduced amount of time after the first
six months.
(b) Best Efforts. Executive agrees that at all times during the Employment
Period he will faithfully, and to the best of his ability, experience
and talents, perform the duties that may be required of and from him
and fulfill his responsibilities hereunder pursuant to the express
terms hereof. Executive's ownership of, or participation (including any
board memberships) in, any entity (other than Company ) must be
disclosed to the Board; provided, however, that Executive need not
disclose any equity interest held in any public company or any private
company that is not engaged in a competing business as defined in
Section 10 of this Agreement when such interest constitutes less than
one percent (1.0%) of the issued and outstanding equity of such public
or private company. The parties recognize that Executive is a Partner
in transition with Quarles & Brady LLP and serves as a member of the
Board of Directors of BIGe Realestate, Inc., a Delaware corporation.
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3. COMPENSATION
(a) Base Salary. Company shall pay Executive a "Base Salary" in
consideration for Executive's services to Company at the rate of
$200,000 per annum. The Base Salary shall be payable as nearly as
possible in equal semi-monthly installments or in such other
installments as are customary from time to time for Company's
executives. The Base Salary may be adjusted from time to time in
accordance with the procedures established by Company for salary
adjustments for executives, provided that the Base Salary shall not be
reduced.
(b) Incentive Compensation.
(1) Executive shall also be permitted to participate in such
incentive compensation plans as are adopted by the Board from
time to time. Beginning on October 10, 2002 and continuing
until September 30, 2003, Executive shall be entitled to an
incentive bonus, calculated and payable quarterly, equal
to.75% of Company's "net earnings," less $75,000 per quarter,
provided that the Company's net earnings exceed the Minimum
Amount for the applicable fiscal quarter. Beginning on October
1, 2003 and continuing through September 30, 2005, Executive
shall be entitled to an incentive bonus, calculated and
payable quarterly, equal to .85% of Company's "net earnings"
less $25,000 per quarter, provided that the Company's net
earnings exceed the Minimum Amount for the applicable fiscal
quarter.
(2) For purposes of calculating Executive's incentive bonus
pursuant to this Subsection (b), Company's "net earnings"
shall be Company's consolidated net after tax earnings,
calculated in accordance with accounting principles generally
accepted in the United States (US GAAP) and applicable
Securities and Exchange Commission regulations, prior to any
incentive bonus amounts for Executive and other executives of
Company, and shall be calculated without deduction for
"one-time" charges incurred in connection with the Company's
(or any of its majority-owned subsidiaries') acquisition of or
merger with any legal entity not owned or controlled by
Company as of October 1, 2002. The amounts payable pursuant to
this Subsection 3(b) shall be paid on or before thirty (30)
days after the public financial reporting by Company at the
end of the applicable fiscal quarter. For purposes of this
subparagraph 3(b)(2), the term "Minimum Amount" means an
amount equal to eighty percent (80%) of the average of the
Company's net earnings for the immediately preceding four
fiscal quarters ended prior to the applicable fiscal quarter.
(3) If upon final presentation of consolidated financial
statements to Company by the Company's outside Certified
Public Accountants, the "net earnings" of Company requires
adjustment for any period for which the Executive received an
incentive bonus hereunder, then, within thirty (30) days after
such presentation, Company or Executive, as the case may be,
shall pay to the other the amount necessary to cause the net
amount of incentive bonus paid to be the proper amount after
adjustment; provided that if Executive shall pay Company
pursuant to the provisions of this clause (3), then the amount
the Executive shall pay will be reduced by the taxes withheld
by Company attributable to such amount ("Withheld Portion"),
and the Company shall apply the Withheld Portion toward
Company's withholding obligations with regard to any
subsequent payments of Base Salary and incentive compensation
made pursuant to Sections 3(a) and 3(b) or, at Company's
option, Executive shall repay to Company any remaining amount
due within seven business days of Company's written request
therefor.
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(c) Signing Bonus. Executive shall be paid signing-bonus amounts, each of
which shall be in the amount of $100,000, on each of the following
dates: January 14, 2003, March 30, 2003, June 15, 2003, January 14,
2004 and January 14, 2005. It shall be a condition precedent to each
such payment that on the date such payment is due, Executive is still
employed by the Company.
(d) Stock Options. Concurrently with the delivery of this Agreement,
Executive is being granted options to purchase 250,000 shares of the
common stock of Company pursuant to Company's 1998 Stock Option Plan.
The option exercise price shall be determined in accordance with the
rules of Company's 1998 Stock Option Plan by reference to the market
price of the shares at the date of grant. Such share options shall vest
as follows: 75,000 options shall vest on October 9, 2003; 75,000
options shall vest on October 9, 2004; 50,000 options shall vest on
October 9, 2005; and 50,000 options shall vest on October 9, 2006. Such
awards shall be subject to the terms and conditions of award agreements
between Executive and Company in the form used for option grants to
Company executives.
(e) Incentive and Benefit Plans. Executive will be entitled to participate
in all incentive compensation and benefit plans reserved for Company's
executives, including any stock option plans, in accordance with the
terms of such compensation and benefit plans. Additionally, Executive
shall be entitled to participate in any other benefit plans sponsored
by Company, including any savings plan, life insurance plan and health
insurance plan available generally to employees of Company from time to
time, subject to any restrictions specified in, or amendments made to,
such plans.
(f) Vacation. Executive shall be entitled to four (4) weeks vacation during
the calendar year, and such additional vacation time as the Board shall
approve, with such vacation to be scheduled and taken in accordance
with Company's standard vacation policies, but this provision is not
intended to interfere with or limit Executive's discretion to determine
the appropriate time to be devoted to his duties hereunder.
4. BUSINESS EXPENSES
Company will reimburse Executive for any and all necessary, customary and usual
expenses which are incurred by Executive on behalf of Company, provided
Executive provides Company with receipts to substantiate the business expense in
accordance with Company's policies or otherwise reasonably justifies the expense
to Company.
5. DEATH OR DISABILITY
(a) Death. This Agreement shall terminate upon Executive's death. Until the
Company adopts a comprehensive program relating to death and disability
for executives, if Executive dies prior to October 10, 2005 while this
Agreement is in effect, Executive's estate shall be entitled to receive
all of the payments and benefits provided by Section 6B, including
those with respect to incentive compensation, and otherwise in this
Agreement to the same extent as if this Agreement had been terminated
by Company without Cause. After the earlier to occur of (i) the time
such a comprehensive program has been adopted and is in effect with
respect to Executive, or (ii) October 10, 2005, Executive's estate
shall be entitled to receive the Base Salary due through the date of
his death and any incentive compensation payable for time periods ended
prior to Executive's death, but no Base Salary or other payment or
benefit will be payable for time periods after death except as
expressly provided elsewhere in this Agreement.
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(b) Disability. The Company may terminate this Agreement upon written
notice to Executive in the event of Executive's "Disability". For
purposes of this Agreement, Executive shall be deemed to have a
"Disability" if, for a minimum continuous period of six (6) months,
Executive meets the definition of "Disability" used to determine
Executive's right to benefits pursuant to the long-term disability
insurance policy in place for Company's exempt employees at the end of
such six-month period and such disability occurs due to a physical or
mental injury or illness that occurs while Executive is actively
employed by Company. Notwithstanding the foregoing, Executive shall be
deemed to have a "Disability" if the sole factor preventing Executive
from otherwise meeting the definition of "Disability" set forth above
is Executive's employment and/or receipt of compensation pursuant to
this Agreement. Until the Company adopts a comprehensive program
relating to death and disability for executives, if this Agreement is
terminated due to Executive's Disability prior to October 10, 2005,
Executive shall be entitled to receive all of the payments and benefits
provided by Section 6B, including those with respect to incentive
compensation, and otherwise in this Agreement to the same extent as if
this Agreement had been terminated by Company without Cause. Company
may not terminate this Agreement for Cause (see Section 6A) due solely
to Executive's breach of Section 2 if such breach is the result of
Executive's Disability. After the earlier to occur of (i) the time such
a comprehensive program has been adopted and is in effect with respect
to Executive, or (ii) October 10, 2005, Executive's estate shall be
entitled to receive the Base Salary due through the date of his
Disability and any incentive compensation payable for time periods
ended prior to Executive's Disability, but no Base Salary or other
payment or benefit will be payable for time periods after Disability
except as expressly provided elsewhere in this Agreement.
6A. TERMINATION BY COMPANY FOR CAUSE
(a) Termination for Cause. Company may terminate this Agreement at any time
during the Initial Term or any Renewal Terms for "Cause" upon written
notice to Executive. If Company terminates this Agreement for "Cause,"
Executive's Base Salary shall immediately cease, and Executive shall
not be entitled to severance payments, incentive compensation payments
or any other payments or benefits pursuant to this Agreement, except
for any vested rights pursuant to any benefit plans in which Executive
participates including Executive's stock options in Company, any
accrued compensation, any accrued vacation pay and similar items. For
purposes of this Agreement, the term "Cause" shall mean the termination
of Executive's employment by Company for one or more of the following
reasons:
(1) The criminal conviction for any felony involving theft or
embezzlement from Company or any affiliate;
(2) The criminal conviction for any felony involving moral
turpitude that reflects adversely upon the standing of Company
in the community;
(3) The criminal conviction for any felony involving fraud
committed against Company, any affiliate or any individual or
entity that provides goods or services to, receives goods or
services from or otherwise deals with Company or any
affiliate;
(4) Acts by Executive that constitute repeated and material
violations of this Agreement, any written employment policies
of Company, or any written directives of Company. A violation
will not be considered to be "repeated" unless such violation
has occurred more than once and after receipt of written
notice from Company of such violation; or
(5) Failure to fully cooperate in any investigation by Company.
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(b) Determination of No Cause. If Company terminates Executive for Cause,
and it is later determined at the conclusion of the Dispute Resolution
process provided in Section 11 of this Agreement that Cause did not
exist, Company will pay Executive the amount he would have received
under this Agreement if his employment had been terminated by Company
without Cause, plus interest at the Prime Rate published by the Wall
Street Journal on the date of termination. Such payments and interest
shall be calculated as of the effective date of the initial
termination. Payment shall be made within fifteen (15) days after such
later determination is made.
(c) Termination by Executive without Good Reason. If Executive terminates
his employment without Good Reason as that term is defined in
Subsection 7(b), the consequences under this Agreement shall be
identical to those of a termination for Cause.
(d) Incentive Compensation. Executive shall not be entitled to receive any
incentive compensation payments for the fiscal quarter in which his
employment is terminated for Cause or any later quarters.
(e) Other Plans. Except to the extent specified in this Section 6A
including this Subsection (e), termination of Executive's employment
under this Agreement shall not affect Executive's participation in,
distributions from, and vested rights under any employee benefit plan
of Company, which will be governed by the terms of those respective
plans, in the event of Executive's termination of employment.
6B. TERMINATION BY COMPANY WITHOUT CAUSE
(a) Termination without Cause. Company also may terminate this Agreement at
any time without Cause. If Company terminates this Agreement pursuant
to this Subsection, Company shall provide Executive with ninety (90)
days advance written notice. This Agreement shall continue during such
notice period. The termination of this Agreement shall be effective on
the ninetieth (90th) day following the day on which the notice is
given. Company may, at its discretion, place Executive on a paid
administrative leave during all or any part of said notice period.
During the administrative leave, Company may bar Executive's access to
Company's offices or facilities if reasonably necessary to the smooth
operation of Company, or may provide Executive with access subject to
such reasonable terms and conditions as Company chooses to impose.
(b) Severance Compensation. If Executive's employment by Company is
terminated without Cause, Executive shall receive as a lump sum
immediately upon such termination the greater of (i) the total amount
of his Base Salary (the greater of Base Salary at the effective date of
the termination or $200,000 per year) for the remainder of the Term,
determined as if the employment of Executive had not been terminated
prior to the end of the Term and as if Executive had continued to
perform all of his obligations under this Agreement and as an employee,
officer and/or director of Company, plus the amounts specified in
section 6B(c), or (ii) the sum of $1,500,000, less all amounts
previously paid to Executive as Base Salary, signing bonus or incentive
compensation pursuant to this Agreement. Except as otherwise provided
herein, Executive shall have no duty to mitigate damages in order to
receive the severance compensation described by this Subsection, and
the severance compensation shall not be reduced or offset by other
income, payments or profits received by Executive from any source.
(c) Incentive Compensation. If Executive's employment by Company is
terminated without Cause, Executive shall receive as a lump sum
immediately upon such termination incentive compensation for the number
of quarters remaining in the Term, with the amount per quarter
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equal to the average bonus paid during the four quarters immediately
preceding either (i) the date of notice of termination or (ii) the date
of termination, as Executive shall elect after receiving the report of
such performance for the applicable fiscal quarters (except that the
bonus shall be calculated at .85% for all such quarters), and as if
Executive had continued to perform all of his obligations under this
Agreement and as an employee of Company. Except as otherwise provided
herein, Executive shall have no duty to mitigate damages in order to
receive the incentive compensation described by this Subsection and the
incentive compensation shall not be reduced or offset by other income,
payments or profits received by Executive from any source.
(d) Other Plans. Except to the extent specified in this Section 6B
including this Subsection (d), termination of this Agreement shall not
affect Executive's participation in, distributions from, and vested
rights under any employee benefit plan of Company, which will be
governed by the terms of those respective plans, in the event of
Executive's termination of employment. If Executive is terminated
without Cause, then Executive shall become fully vested under any and
all stock bonus and stock option plans and agreements in which
Executive had an interest, vested or contingent. If applicable law or
the terms of such plan(s) prohibit such vesting, then Company shall pay
Executive an amount equal to the value of the benefits and rights that
would have, but for such prohibition, been vested. Except as otherwise
provided herein, Executive shall have no duty to mitigate damages in
order to receive the compensation described by this Subsection and the
compensation shall not be reduced or offset by other income, payments
or profits received by Executive from any source.
(e) Example. For example, if Company were to provide notice to Executive of
Termination without Cause on January 1, 2004, then the Employment
Period would end ninety days thereafter, on April 1, 2004, and Company
would pay to Executive in a lump sum payment immediately thereafter the
amount payable pursuant to Section 6B(b) Additionally, on April 1, 2004
Executive would become fully vested in all Company stock bonus and
stock option plans and agreements in which Executive had an interest.
7. TERMINATION BY EXECUTIVE
(a) General. Executive may terminate this Agreement at any time, with or
without "Good Reason." If Executive terminates this Agreement without
Good Reason, Executive shall provide Company with ninety (90) days
advance written notice. If Executive terminates this Agreement with
Good Reason, Executive shall provide Company with thirty (30) days
advance written notice.
(b) Good Reason Defined. For purposes of this Agreement, "Good Reason"
shall mean and include each of the following (unless Executive has
expressly agreed to such event in a signed writing):
(1) The assignment to Executive of duties which are not executive
in nature, except in connection with the termination of this
Agreement for Cause, Executive's death or Disability,
termination by Executive other than for Good Reason, or the
expiration of the Agreement without renewal;
(2) The recommended travel of Executive by the Board in
furtherance of Company business which is materially more
extensive than Executive's travel or contemplated travel as of
the effective date of this Agreement;
(3) The assignment of Executive by Company to a location more than
50 miles from the present executive offices of Company;
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(4) Reduction by Company in Executive's Base Salary as set forth
in this Agreement or as the same may be increased from time to
time;
(5) Failure by Company to continue in effect any incentive
compensation program, policy or practice, or any savings, life
insurance, health and accident or disability plan in which
Executive is participating on the effective date of this
Agreement (or plans which provide Executive with substantially
similar benefits), or to continue in effect a comprehensive
death and disability plan for executives at least as favorable
to Executive as the initial plan adopted, or the taking of any
action by Company which would adversely affect Executive's
participation in or materially reduce his benefit under any of
such plans or deprive him of any material fringe benefit
enjoyed by him as of the effective date of this Agreement or
any later date. Amendment or modification of said plans, to
the extent required pursuant to applicable federal law and the
procedures set forth in the respective plan, or except as
otherwise provided herein, amendments of such plans that apply
to either all employees generally or all senior executives
shall not be considered to be "Good Reason" for purposes of
this clause (5);
(6) Failure of Company to obtain a specific written agreement
satisfactory to Executive from any successor to the business,
or substantially all the assets of Company, to assume this
Agreement or issue a substantially similar agreement;
(7) The termination or attempted termination of this Agreement by
Company purportedly for Cause if it is thereafter determined
as provided in Section 6A(b) that Cause did not exist under
this Agreement with respect to the termination;
(8) Breach of any material provisions of this Agreement by Company
which is not cured within thirty (30) days after receipt by
Company of written notice of such breach from Executive; or
(9) Any action taken by Company over the specific,
contemporaneous, written objection of Executive that is likely
(i) to cause a material reduction in the value of this
Agreement to Executive or (ii) to materially impair
Executive's abilities to discharge his duties hereunder. This
provision is not intended to affect either Company's or
Executive's right to terminate this Agreement as provided for
elsewhere herein.
(c) Effect of Good Reason Termination. If Executive terminates this
Agreement for Good Reason, as defined in Subsection 7(b), Executive
shall be entitled to receive all of the payments and benefits provided
by Section 6B, including those with respect to incentive compensation,
and otherwise in this Agreement to the same extent as if this Agreement
had been terminated by Company without Cause.
8. CHANGE IN CONTROL OF COMPANY
(a) General. Company considers the maintenance of a sound and vital
management to be essential to protecting and enhancing the best
interests of Company and Company's shareholders. Company recognizes
that, as is the case with many publicly held corporations, the
continuing possibility of an unsolicited tender offer or other takeover
bid for Company may be unsettling to Executive and other senior
executives of Company and may result in the departure or distraction of
management personnel to the detriment of Company and Company's
shareholders. The Board and the Compensation Committee of the Board
(the "Committee") have previously determined that it is in the best
interests of Company and Company's shareholders for Company to minimize
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these concerns by making this Change in Control provision an integral
part of this Employment Agreement, which would provide Executive with a
continuation of benefits in the event Executive's employment with
Company terminates under certain limited circumstances.
This provision is offered to help assure a continuing dedication by
Executive to his duties to Company notwithstanding the occurrence of a
tender offer or other takeover bid. In particular, the Board and the
Committee believe it important, should Company receive proposals from
third parties with respect to its future, to enable Executive, without
being influenced by the uncertainties of his own situation, to assess
and advise the Board whether such proposals would be in the best
interests of Company and Company's shareholders and to take such other
action regarding such proposals as the Board might determine to be
appropriate. The Board and the Committee also wish to demonstrate to
Executive that Company is concerned with his welfare and intends to see
he is treated fairly.
(b) Continued Eligibility to Receive Benefits. In view of the foregoing and
in further consideration of Executive's continued employment with
Company, if a Change in Control occurs, Executive shall be entitled to
a lump-sum severance benefit provided in Subsection 8(c) if, prior to
the expiration of twenty-four (24) months after the Change in Control,
Executive notifies Company of his intent to terminate his employment
with Company for Good Reason or Company terminates Executive's
employment without Cause or if, prior to the expiration of one hundred
twenty (120) days after the Change in Control, Executive terminates his
employment with Company. If Executive triggers the application of this
Section by terminating employment for Good Reason, he must do so within
one hundred twenty (120) days following his receipt of notice of the
occurrence of the last event that constitutes Good Reason. The full
severance benefits provided by this Section shall be payable regardless
of the period remaining until the expiration of the Agreement without
renewal.
(c) Receipt of Benefits. If Executive is entitled to receive a severance
benefit pursuant to Subsection 8(b) hereof, Company will provide
Executive with the following benefits:
(1) A lump sum severance payment within ten (10) days following
Executive's last day of work equal to the greater of (i) the
sum of $1,500,000, less all amounts previously paid to
Executive as Base Salary or Incentive Compensation pursuant to
this Agreement, or (ii) the sum of (x) two times the greater
of Executive's annualized Base Salary in effect on the date of
termination of employment or Executive's highest annualized
Base Salary in effect on any date during the term of this
Agreement and (y) two times the amount of all incentive
compensation paid or accrued to Executive for Company's most
recent four fiscal quarters then ended.
(2) Executive shall become fully vested in any and all stock bonus
and stock option plans and agreements of Company in which
Executive had an interest, vested or contingent. If applicable
law or the terms of such plan(s) prohibit such vesting, then
Company shall pay Executive an amount equal to the value of
benefits and rights that would have, but for such prohibition,
have been vested in Executive.
(3) Executive will continue to receive life, disability, accident
and group health and dental insurance benefits substantially
similar to those which he was receiving immediately prior to
his termination of employment until the earlier of (i) the end
of the period of 24 months following his termination of
employment or (ii) the day on which he becomes eligible to
receive any substantially similar continuing health care
benefits under any plan or program of any other employer. The
benefits provided pursuant to this Subsection
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shall be provided on substantially the same terms and
conditions as they were provided prior to the Change in
Control, except that the full cost of such benefits shall be
paid by Company. Executive's right to receive continued
coverage under Company's group health plans pursuant to
Section 601 et seq. of the Employee Retirement Income Security
Act of 1974, as it may be amended or replaced from time to
time, shall commence following the expiration of his right to
receive continued benefits under this Agreement. Executive's
right to receive all forms of benefits under this Section is
reduced to the extent he is eligible to receive any health
care benefit from any other employer without his request to
pay any premium with respect thereto.
(4) Executive shall have no duty to mitigate damages or loss in
order to receive the benefits provided by this Section. If
Executive is entitled to receive the payments called for by
this Subsection 8(c), Executive's right to receive the
compensation provided by Sections 6A, 6B and 7 shall to the
extent of such payments be reduced.
(d) Change in Control Defined. For purposes of this Agreement, a "Change in
Control" means any one or more of the following events:
(1) When the individuals who, at the beginning of any period of
two years or less, constituted the Board of Company cease, for
any reason, to constitute at least a majority thereof unless
the election or nomination for election of each new director
was approved by the vote of at least two thirds of the
directors then still in office who were directors at the
beginning of such period;
(2) A change of control of Company through a transaction or series
of transactions, such that any person (as that term is used in
Sections 13 and 14(d)(2) of the Securities Exchange Act of
1934 ("1934 Act")), excluding affiliates of Company as of the
Effective Date, is or becomes the beneficial owner (as that
term is used in Section 13(d) of the 1934 Act) directly or
indirectly, of securities of Company representing 50% or more
of the combined voting power of Company's then outstanding
securities;
(3) Any merger, consolidation or liquidation of Company in which
Company is not the continuing or surviving company or pursuant
to which stock would be converted into cash, securities or
other property, other than a merger of Company in which the
holders of the shares of stock immediately before the merger
have the same proportionate ownership of common stock of the
surviving company immediately after the merger;
(4) The shareholders of Company approve any plan or proposal for
the liquidation or dissolution of Company; or
(5) Substantially all of the assets of Company are sold or
otherwise transferred to parties that are not within a
"controlled group of corporations" (as defined in Section 1563
of the Internal Revenue Code of 1986, as amended (the "Code")
in which Company is a member at the effective date of this
Agreement.
(e) Good Reason Defined. For purposes of this Section, "Good Reason" shall
have the meaning assigned to it in Subsection 7(b).
(f) Notice of Termination by Executive. Any termination by Executive under
this Section 8 shall be communicated by written notice to Company which
shall set forth generally the facts and circumstances claimed to
provide a basis for such termination.
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(g) Gross-Up Allowance.
(1) General Rules. The Code places significant tax consequences on
Executive and Company if the total payments made to Executive
due, or deemed due, to a Change in Control exceed prescribed
limits. For example, if Executive's "Base Period Income" (as
defined below) is $100,000 and Executive's "Total Payments"
exceed 299% of such Base Period Income (the "Cap"), Executive
will be subject to an excise tax under Section 4999 of the
Code of 20% of all amounts paid to him in excess of $100,000.
In other words, if Executive's Cap is $299,999, he will not be
subject to an excise tax if he receives exactly $299,999. If
Executive receives $300,000, he will be subject to an excise
tax of $40,000 (20% of $200,000). In the event that an excise
tax is imposed on Executive as a result of the application of
Sections 280G and 4999 of the Code, for any reason, due to
this Agreement or otherwise, Company shall pay to Executive a
"gross-up allowance" equal in amount to the sum of (i) the
excise tax liability of Executive on the Total Payments, and
(ii) all the total excise, income, and payroll tax liability
of Executive on the "gross-up allowance," further increased by
all additional excise, income, and payroll tax liability
thereon, which increase shall be part of the "gross-up
allowance" for purpose of computing the "gross-up allowance."
Company shall indemnify and hold Executive harmless from such
additional tax liability for the income and payroll tax
arising from the "gross-up allowance" and all excise tax
arising with respect to compensation and other payments made
to Executive under this Agreement and excise, income, and
payroll tax on the "gross-up allowance," and all penalties and
interest thereon. The purpose and effect of the gross-up
allowance is to cause Executive to have the same net
compensation after income, excise, and payroll taxes that
Executive would have if there was no tax under Code
Section 4999.
(2) Special Definitions. For purposes of this Section, the
following specialized terms will have the following meanings:
(A) "Base Period Income". "Base Period Income" is an
amount equal to Executive's "annualized includable
compensation" for the "base period" as defined in
Sections 280G(d)(1) and (2) of the Internal Revenue
Code of 1986, as amended (the "Code") and the
regulations adopted thereunder. Generally,
Executive's "annualized includable compensation" is
the average of his annual taxable income from Company
for the "base period," which is the five calendar
years prior to the year in which the Change of
Control occurs.
(B) "Cap" or "280G Cap". "Cap" or "280G Cap" shall mean
an amount equal to 2.99 times Executive's "Base
Period Income." This is the maximum amount which he
may receive without becoming subject to the excise
tax imposed by Section 4999 of the Code or which
Company may pay without loss of deduction under
Section 280G of the Code.
(C) "Total Payments". The "Total Payments" include any
"payments in the nature of compensation" (as defined
in Section 280G of the Code and the regulations
adopted thereunder), made pursuant to this Agreement
or otherwise, to or for Executive's benefit, the
receipt of which is contingent or deemed contingent
on a Change of Control and to which Section 280G of
the Code applies.
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(3) Inclusion of Successor Sections. For purposes of this
Subsection 8(g), any reference to any Section of the Code also
shall be deemed a reference to any Code Section resulting from
the modification, amendment, renumbering or replacement of
such Code Section.
(h) Effect of Repeal. In the event that the provisions of Sections 280G and
4999 of the Code are repealed without succession, Subsection 8(g) shall
be of no further force or effect.
(i) Employment by Successor. For purposes of this Agreement, employment by
a successor of Company, or affiliate thereof, that has assumed this
Agreement, shall be considered to be employment by Company or one of
its affiliates. As a result, if Executive is employed by such a
successor following a Change in Control, he will not be entitled to
receive the benefits provided by Section 8 unless his employment with
the successor is subsequently terminated without Cause, he terminates
his employment for Good Reason, or he terminates his employment within
120 days after the Change in Control in accordance with Subsection 8(b)
of this Agreement.
9. CONFIDENTIALITY
Executive covenants and agrees to hold in strictest confidence, and not disclose
to any person, firm or company, without the express written consent of Company,
any and all of Company's and all subsidiaries of Company's (collectively,
"Company's Family") confidential data, including the existence and terms of this
Agreement, the terms and circumstances of the termination (by either party) of
this Agreement, and information and documents concerning Company's Family's
business, customers, and suppliers, market methods, files, trade secrets, or
other "know-how" or techniques or information not of a published nature or
generally known (for the duration they are not published or generally known)
which shall come into his possession, knowledge, or custody concerning the
business of Company's Family, except as such disclosure may be required by law
or in connection with Executive's employment hereunder or except as such matters
may have been known to Executive at the time of his employment by Company. This
covenant and agreement of Executive shall survive this Agreement and continue to
be binding upon Executive after the expiration or termination of this Agreement,
whether by passage of time or otherwise so long as such information and data
shall be treated as confidential by Company's Family.
10. RESTRICTIVE COVENANTS
(a) Covenant Not to Compete.
(1) In consideration of Company's agreements contained herein and
the payments to be made by it to Executive pursuant hereto, in
the event of either the termination of Executive's employment
by Company with Cause or the termination of employment by
Executive without Good Reason, Executive agrees that, for two
years ("Time Period") following his termination of employment
and so long as Company is continuously not in default of its
obligations to Executive hereunder or under any other
agreement, covenant, or obligation, he will not, without prior
written consent of Company, consult with or act as an advisor
to another company about activity which is a "Competing
Business" of such company in the United States, Canada or
Europe ("Area"). For purposes of this Agreement, Executive
shall be deemed to be engaged in a "Competing Business" if, in
any capacity, including proprietor, partner, officer, director
or employee, he engages or participates, directly or
indirectly, in the operation, ownership or management of the
activity of any proprietorship, partnership, company or other
business entity which activity is competitive with the then
actual business in which any member of Company's Family is
engaged on the date of, or any business contemplated by
Company's business plan in effect on the date of notice of,
Executive's termination of employment. Nothing in this
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subparagraph is intended to limit Executive's ability to own
equity in a public company constituting less than one percent
(1%) of the outstanding equity of such company, when Executive
is not actively engaged in the management thereof. Company
shall furnish Executive with a good-faith written description
of the business or businesses in which Company's Family is
then actively engaged within 30 days after Executive's
termination of employment, and only those activities so timely
described which are in fact actively engaged by Company's
Family may be treated as activities of which one may be
engaged that is competitive with Company's Family.
(2) The "Time Period" used for the purposes of Section 10(a)(1)
shall be shortened to six months in the event Executive's
employment is terminated by Company "without Cause" or by
Executive for "Good Reason."
(b) Non-Solicitation. Executive recognizes that Company's Family's
customers are valuable and proprietary resources of Company's Family.
Accordingly, Executive agrees that for a period of two years following
his termination of employment, and only so long as Company is
continuously not in default of its obligations to Executive hereunder
or under any other agreement, covenant, or obligation, he will not
directly or indirectly, through his own efforts or through the efforts
of another person or entity, solicit business from any individual or
entity located in the United States, Canada, or Europe which obtained
services from Company's Family at any time during Executive's
employment with Company, he will not solicit business from any
individual or entity located in the United States, Canada, or Europe
which was solicited by Executive on behalf of Company's Family, and he
will not solicit employees of Company's Family who would have the
skills and knowledge necessary to enable or assist efforts by Executive
to engage in a Competing Business. This covenant shall apply for all
terminations of this Agreement by either party.
(c) Remedies: Reasonableness. Executive acknowledges and agrees that a
breach by Executive of the provisions of this Section 10 will
constitute such damage as will be irreparable and the exact amount of
which will be impossible to ascertain and, for that reason, agrees that
Company will be entitled to an injunction to be issued by any court of
competent jurisdiction restraining and enjoining Executive from
violating the provisions of this Section. The right to an injunction
shall be in addition to and not in lieu of any other remedy available
to Company for such breach or threatened breach, including the recovery
of damages from Executive.
Executive expressly acknowledges and agrees that (i) the Restrictive
Covenants contained herein are reasonable as to time and geographical
area and do not place any unreasonable burden upon him; (ii) the
general public will not be harmed as a result of enforcement of these
Restrictive Covenants; and (iii) Executive understands and hereby
agrees to each and every term and condition of the Restrictive
Covenants set forth in this Agreement.
11. DISPUTE RESOLUTION
(a) Mediation. Any and all disputes between the parties arising during the
term of this Agreement, or arising at any time related to this
Agreement or the relationship of the parties arising out of this
Agreement, shall, if not settled by negotiation, be subject to
non-binding mediation before an independent mediator selected by the
parties pursuant to Subsection 11(d). Notwithstanding the foregoing,
both Executive and Company may seek preliminary injunctive or other
judicial relief if such action is necessary to avoid irreparable damage
during the pendency of the proceedings described in this Section 11.
Any demand for mediation shall be made in writing and served upon the
other party to the dispute personally, or by certified mail, return
receipt requested, at the
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address specified in Section 13. The demand shall set forth with
reasonable specificity the basis of the dispute and the relief sought.
The mediation hearing will occur at a time and place convenient to the
parties in Maricopa County, Arizona, within thirty (30) days of the
date of selection or appointment of the mediator. Each of the parties
shall bear its own costs of participation and representation with
regard to any mediation, and each shall pay one-half of all charges
billed by the mediator.
(b) Arbitration. In the event that the dispute is not settled through
mediation, the parties shall then proceed to binding arbitration before
an independent arbitrator selected pursuant to Subsection 11(d). The
mediator shall not serve as the arbitrator. EXCEPT AS PROVIDED IN
SUBSECTION 11 (a) OR A CONFIRMATION PROCEEDING AS SET FORTH IN
SUBSECTION 11(c), ALL DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT
DISCRIMINATION, TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY, OR
ALLEGED EMPLOYMENT TORT COMMITTED BY COMPANY OR A REPRESENTATIVE OF
COMPANY, INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR STATE
DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED PURSUANT TO
THIS SECTION 11 AND THERE SHALL BE NO RECOURSE TO COURT, AND ALL RIGHTS
OR REQUESTS FOR A JURY TRIAL ARE EXPRESSLY WAIVED.
The arbitration hearing shall occur at a time and place convenient to
the parties in Maricopa County, Arizona, within thirty (30) days of
selection or appointment of the arbitrator. If Company has adopted a
lawful policy that is applicable to arbitrations with executives, the
arbitration shall be conducted in accordance with said policy, to the
extent that the policy is consistent with this Agreement and the
Federal Arbitration Act, 9 U.S.C. Sections 1-16. If no such policy has
been adopted, the arbitration shall be governed by the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association ("AAA") in effect on the date of the first notice of demand
for arbitration. Notwithstanding any provisions in such rules to the
contrary, the arbitrator shall issue findings of fact and conclusions
of law, and an award, within fifteen (15) days of the date of the
hearing unless the parties otherwise agree.
(c) Damages. In case of breach of contract, damages shall be limited to
contract damages. In cases of claims based on an alleged statutory
violation, the remedy shall be limited to the remedies provided by the
applicable statute. In cases of employment tort, the arbitrator may
award punitive damages if proved by clear and convincing evidence.
Issues of procedure, arbitrability, or confirmation of award shall be
governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16, except
that court review of the arbitrator's award shall be that of an
appellate court reviewing a decision of a trial judge sitting without a
jury.
(d) Selection of Mediator or Arbitrator. The parties shall select the
mediator and arbitrator from a panel list made available by the AAA. If
the parties are unable to agree to a mediator or an arbitrator within
ten (10) days of receipt of a demand for mediation or arbitration, the
mediator or arbitrator will be chosen by alternatively striking from a
list of five (5) mediators or arbitrators obtained by Company from the
AAA. Executive shall have the first strike.
(e) Expenses. The prevailing party's costs and expenses of any arbitration
(including reasonable attorneys' fees and costs) shall be awarded to
such prevailing party to such arbitration as determined by the
arbitrator.
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12. BENEFIT AND BINDING EFFECT
This Agreement shall inure to the benefit of and be binding upon Company, its
successors and assigns, including any company, person, or other entity which may
acquire all or substantially all of the assets and business of Company or any
company with or into which Company may be consolidated or merged, and Executive,
his heirs, executors, administrators, and legal representatives, provided that
the obligations of Executive may not be delegated.
13. NOTICES
All notices hereunder shall be in writing and delivered personally, sent by
overnight commercial carrier requiring a signature release, or sent by
registered or certified mail, postage prepaid and return receipt requested:
If to Company, to: Insight Enterprises, Inc.
c/o Timothy A. Crown, CEO
1305 West Auto Drive
Tempe, Arizona 85284
If to Executive, to: P. Robert Moya
5119 E. Desert Park Lane
Paradise Valley, Arizona 85253
Either party may change the address to which notices are to be sent to it by
giving ten (10) days written notice of such change of address to the other party
in the manner above provided for giving notice. Notices will be considered
delivered on personal delivery, on date of deposit with overnight commercial
carrier or on the date of deposit in the United States mail in the manner
provided for giving notice by mail.
14. ENTIRE AGREEMENT
The entire understanding and agreement between the parties has been incorporated
into this Agreement, and this Agreement supersedes all other agreements and
understandings between Executive and Company with respect to the relationship of
Executive with Company, except with respect to other continuing or future bonus,
incentive, stock option, health, benefit and similar plans or agreements.
15. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Arizona.
16. CAPTIONS
The captions included herein are for convenience and shall not constitute a part
of this Agreement.
17. DEFINITIONS
Throughout this Agreement, certain defined terms will be identified by the
capitalization of the first letter of the defined word or the first letter of
each substantive word in a defined phrase. Whenever used, these terms will be
given the indicated meaning.
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18. SEVERABILITY
If any one or more of the provisions or parts of a provision contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity or unenforceability shall not affect any other
provision or part of a provision of this Agreement, but this Agreement shall be
reformed and construed as if such invalid, illegal or unenforceable provision or
part of a provision had never been contained herein and such provisions or part
thereof shall be reformed so that it would be valid, legal and enforceable to
the maximum extent permitted by law. Any such reformation shall be read as
narrowly as possible to give the maximum effect to the mutual intentions of
Executive and Company.
19. TERMINATION OF EMPLOYMENT
The termination of this Agreement by either party also shall result in the
termination of Executive's employment relationship with Company in the absence
of an express written agreement providing to the contrary. Neither party intends
that any oral employment relationship continue after the termination of this
Agreement.
20. TIME IS OF THE ESSENCE
Company and Executive agree that time is of the essence with respect to the
duties and performance of the covenants and promises of this Agreement.
21. CONSTRUCTION
The language in all parts of this Agreement shall in all cases be construed as a
whole according to its fair meaning and not strictly for or against any party.
The Section, Subsection and Subparagraph headings contained in this Agreement
are for reference purposes only and will not affect the meaning or
interpretation of this Agreement in any way. All terms used in one number or
gender shall be construed to include any other number or gender as the context
may require. This Agreement is the result of negotiation between Company and
Executive and both have had the opportunity to have this Agreement reviewed by
their legal counsel and other advisors. Accordingly, no provision of this
Agreement or any amendments or exhibits hereto shall be construed for or against
Company or Executive, regardless of which party drafted the provision at issue.
Whenever the words "include," "includes," or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without limitation.
COMPANY:
INSIGHT ENTERPRISES, INC.,
a Delaware corporation
____________________________________________
By: Timothy a. Crown, CEO
EXECUTIVE:
____________________________________________
P. Robert Moya
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