Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of July 5, 2001 (the "Effective Date"), by and between Michael Fazio (the
"Executive") and Comdisco, Inc. (the "Company").
WHEREAS, the Company desires to provide for the service and employment
of the Executive with the Company and the Executive wishes to perform services
for the Company, all in accordance with the terms and conditions provided
herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Executive and the
Company as follows, effective as of the Effective Date:
1. Performance of Services. The Executive's employment with the Company
shall be subject to the following:
(a) Subject to the terms of this Agreement, the Company hereby agrees
to employ the Executive as its Executive Vice President and Chief
Financial Officer or a more senior position during the Agreement
Term (as defined below), and the Executive hereby agrees to
remain in the employ of the Company during the Agreement Term.
(b) During the Agreement Term, while the Executive is employed by the
Company, the Executive shall devote his full time, energies and
talents to serving as its Executive Vice President and Chief
Financial Officer or a more senior position.
(c) The Company agrees that its Board of Directors will elect the
Executive, as a member of the Board of Directors of the Company
not later than the first regularly scheduled meeting of the Board
of Directors to occur after the Effective Date. The Executive
agrees that he will serve on the boards of directors of the
Company's Subsidiaries (as defined below) as the Company shall
request from time to time.
(d) The Executive agrees that he shall perform his duties faithfully
and efficiently subject to the directions of the Chairman and
Chief Executive Officer. The Executive's duties may include
providing services for both the Company and the Subsidiaries, as
determined by the Chairman and Chief Executive Officer; provided
that the Executive shall not, without his consent, be assigned
tasks that would be inconsistent with those of Executive Vice
President and Chief Financial Officer or a more senior position.
The Executive shall report to the Chairman and Chief Executive
Officer and shall have such authority, power, responsibilities
and duties as are inherent in his position (and the undertakings
applicable to his position) and necessary to carry out his
responsibilities and the duties required of him hereunder. The
Executive will also be subject to the Company policies that are
applicable to the Company's other senior management employees.
Notwithstanding the foregoing provisions of this paragraph 1,
during the Agreement Term, the Executive may devote reasonable
time to activities other than those required under this
Agreement, including activities involving professional,
charitable, community, educational, religious and similar types
of organizations, speaking engagements, membership on the boards
of directors of other organizations, and similar types of
activities, to the extent that such other activities do not, in
the judgment of the Chairman and Chief Executive Officer, inhibit
or prohibit the performance of the Executive's duties under this
Agreement, or conflict in any material way with the business of
the Company or any Subsidiary; provided, however, that the
Executive shall not serve on the board of any business, render to
others services of any kind for compensation, or hold any other
position with any business, without the written consent of the
Board.
(e) Subject to the terms of this Agreement, the Executive shall not
be required to perform services under this Agreement during any
period that he is Disabled. The Executive shall be considered
"Disabled" during any period in which he has a physical or mental
disability which renders him incapable, after reasonable
accommodation, of performing his duties under this Agreement. In
the event of a dispute as to whether the Executive is Disabled,
the Company may refer the same to a mutually acceptable licensed
practicing physician, and the Executive agrees to submit to such
tests and examinations as such physician shall deem appropriate.
During the period in which the Executive is Disabled, the Company
may appoint a temporary replacement to assume the Executive's
responsibilities.
(f) The "Agreement Term" shall be the period beginning on July 5,
2001 (the "Employment Commencement Date") and ending on the
two-year anniversary of the Employment Commencement Date.
(g) For purposes of this Agreement, the term "Subsidiary" shall mean
any corporation, partnership, joint venture or other entity
during any period in which at least a fifty percent interest in
such entity is owned, directly or indirectly, by the Company (or
a successor to the Company).
2. Compensation. Subject to the terms of this Agreement, during the
Agreement Term, while the Executive is employed by the Company, the Company
shall compensate him for his services as follows:
(a) Salary. The Executive shall receive, for each 12 consecutive
month period beginning on the Employment Commencement Date and
each anniversary thereof, in substantially equal monthly or more
frequent installments, an annual base salary of not less than
$500,000 (the "Salary"). The Executive's Salary rate shall be
reviewed by the Board on or about October 1 of each year during
the Agreement Term, while the Executive is employed by the
Company, to determine whether an increase in the amount of Salary
is appropriate. The salary rate of the Executive shall not be
reduced.
(b) Annual Bonus. The Executive shall participate in an annual bonus
program. The bonus program shall provide for a maximum bonus
amount of 100% of the Executive's annual salary (the "Annual
Bonus"), which shall be pro-rated for the 2001 fiscal year of the
Company based on the actual number of days of service of the
Executive during such fiscal year. The performance goals shall be
established by the Board. For the period ending on the first
anniversary of the Employment Commencement Date, the Executive
shall be entitled to a guaranteed bonus in an amount equal to
100% of the Executive's annual salary, which amount shall be
payable in quarterly installments on the last business day of
each of the four consecutive quarters commencing with the quarter
ending September 30, 2001; provided, that the Executive is
employed by the Company on the date such installment is payable
and such payments are offset against any payments otherwise
earned under the annual bonus programs in the Company's 2001 and
2002 fiscal years allocable to the first twelve months following
the Employment Commencement Date.
(c) Location. The Executive's office shall be in the Company's
headquarters. As of July 5, 2001, such headquarters have been in
Rosemont, Illinois. Thereafter, the headquarters shall be at
Rosemont or such other location as is determined by the Board.
During the first ten months of the Agreement Term, the Executive
may reside in Greenwich, Connecticut. During such period, the
Executive will be provided with round-trip commercial first class
airline transportation for commuting to and from Greenwich,
Connecticut. The Executive shall be entitled to a Tax Gross-Up
with respect to the provision of such transportation.
(d) Apartment. During the first ten months of the Agreement Term, the
Company will provide the Executive with a furnished apartment or
other suitable accommodations in the vicinity of the Company's
headquarters. The Executive shall be entitled to a Tax Gross-Up
with respect to the provision of such apartment. The total cost
to the Company under this paragraph 2(d), excluding any Tax
Gross-Up, shall not exceed $18,000, except that such limitation
shall not apply to expenses incurred during the first month of
the Agreement Term.
(e) Relocation. The Executive shall be provided with relocation
benefits consistent with the Company's relocation benefits
program established by the Company for its senior officers at the
time of such relocation.
(f) Expenses. The Executive is authorized to incur reasonable
expenses for entertainment, traveling, meals, lodging and similar
items in promoting the Company's business. The Company will
reimburse the Executive for all reasonable business expenses so
incurred, provided that such expenses are incurred and accounted
for in accordance with the reasonable policies and procedures
established by the Company.
(g) Vacation. The Executive shall be eligible for four weeks of
vacation per fiscal year; provided, that the Executive shall be
eligible for one week of vacation for the 2001 fiscal year of the
Company.
(h) Fringe Benefits. Except as otherwise specifically provided to the
contrary in this Agreement, the Executive shall be provided with
the welfare benefits and other fringe benefits to the same extent
and on the same terms as those benefits are provided by the
Company from time to time to the Company's other senior
management employees; provided, however, that if any such
benefits are adjusted to reflect an executive's position, the
Executive's benefits shall be adjusted in a manner commensurate
with his position. The Executive shall also be entitled to the
perquisites that are customarily provided in connection with his
position. Nothing in this paragraph 2(h) shall be construed to
prevent the Company from revising the benefits or perquisites
generally provided to executives from time to time. However, the
Company shall not be required to provide a benefit under this
paragraph 2(h) if such benefit would duplicate (or otherwise be
of the same type as) a benefit specifically required to be
provided under another provision of this Agreement. The Executive
shall complete all forms and physical examinations, and otherwise
take all other similar actions to secure coverage and benefits
described in this paragraph 2(h), to the extent determined to be
necessary or appropriate by the Company.
(i) Tax Gross-Up. The term "Tax Gross-Up" with respect to any benefit
means an amount payable to the Executive such that, after payment
of federal, state and local income taxes, payroll taxes, excise
and other taxes applicable to the Executive on such amount, there
remains a balance sufficient to pay all such taxes being
reimbursed as determined by the Company's auditors.
(j) $500,000 Signing Bonus. As soon as practicable after the
Effective Date, the Executive shall receive from the Company a
one-time lump sum cash payment of $500,000.
(k) Emergence Bonus. In the event that the Company commences judicial
reorganization cases under Title 11 of the United States Code,
the Executive shall receive the amount of $1,000,000 in cash or
cash equivalents on the effective date of any confirmed plan of
reorganization in such cases provided that: (a) the
reorganization plan provides for the emergence and reorganization
of at least one of the three principal businesses in which the
Company is engaged as of the date of this Agreement; (b) the
Executive is employed with the Company on the date that such
reorganization plan is first filed in such cases in the executive
position provided for in this Agreement or a more senior
position; and (c) the Executive meets reasonable performance
criteria as determined by the Chairman and Chief Executive
Officer and the Compensation Committee of the Board of Directors
during such cases.
3. Termination. The Executive's employment with the Company during
the Agreement Term may be terminated by the Company or the Executive without
any breach of this Agreement only under the circumstances described in
paragraphs 3(a) through 3(f):
(a) Death. The Executive's employment hereunder will terminate upon
his death.
(b) Permanent Disability. The Company may terminate the Executive's
employment during any period in which he is Permanently
Disabled. The Executive shall be considered "Permanently
Disabled" during any period in which he is Disabled; provided,
however, that the Executive shall not be considered to be
"Permanently Disabled" unless (i) the Executive, as a result of
a physical or mental disability, is incapable, after reasonable
accommodation, of performing any substantial portion of the
Executive's duties under this Agreement on a permanent,
full-time basis; and (ii) such disability is determined by the
Board to be of a long-term nature. In the event of a dispute as
to whether the Executive is Permanently Disabled, the Company
may refer the same to a mutually acceptable licensed practicing
physician, and the Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(c) Cause. The Company may terminate the Executive's employment
hereunder at any time for Cause. For purposes of this
Agreement, the term "Cause" shall mean:
(i) the willful and continued failure by the Executive to
substantially perform his material duties with the
Company (other than any such failure resulting from the
Executive's being Disabled), within a reasonable period
of time after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in
which the Board believes that the Executive has not
substantially performed his duties;
(ii) the willful engaging by the Executive in conduct which
is demonstrably and materially injurious to the
Company, monetarily or otherwise; or
(iii) the engaging by the Executive in egregious misconduct
involving serious moral turpitude with the result that
the Executive's credibility and reputation no longer
conform to the standard of the Company's executives.
For purposes of this Agreement, no act, or failure to
act, on the Executive's part shall be deemed "willful"
unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that
the Executive's action or omission was in the best
interest of the Company. "Cause" shall not include (i)
bad judgment, (ii) failure of the Company to meet
financial performance objectives, or (iii) any act or
omission of which any member of the Board who is not a
party to such act or omission has had actual knowledge
for at least twelve months.
(d) Constructive Discharge. If (I) the Executive provides written
notice to the Company of the occurrence of Good Reason (as
defined below) within a reasonable time after the Executive has
knowledge of the circumstances constituting Good Reason, which
notice shall specifically identify the circumstances which the
Executive believes constitute Good Reason; (II) the Company
fails to correct the circumstances within 30 days after
receiving such notice; and (III) the Executive resigns within a
reasonable time after the Company fails to correct such
circumstances; then the Executive shall be considered to have
been subject to a Constructive Discharge by the Company. For
purposes of this Agreement, "Good Reason" shall mean, without
the Executive's express written consent (and except in
consequence of a prior termination of the Executive's
employment), the occurrence of any one or more of the following
circumstances:
(i) A material adverse change in the status, title,
authority, responsibilities or perquisites of the
Executive. "Good Reason" shall be deemed to exist under
this paragraph 3(d)(i) if the Executive is not, within
six months following the Employment Commencement Date,
appointed to the position of Chief Operating Officer of
the Company (or a more senior position) and, within
twelve months of the Employment Commencement Date,
appointed to the position of Chief Executive Officer of
the Company.
(ii) A reduction by the Company in the Executive's salary or
benefits to an amount that is less than required under
paragraph 2.
(iii) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph
3(g) below (and, if applicable, the requirements of
paragraph 3(b) above), and for purposes of this
Agreement, no such purported termination shall be
effective.
(iv) Any material breach of this Agreement by the Company
not described in paragraphs 3(d)(i) through 3(d)(iii)
above.
The Executive's right to terminate his employment
pursuant to this paragraph 3(d) shall not be affected
by his incapacity due to physical or mental illness.
(e) Termination by Executive. The Executive may terminate his
employment hereunder at any time for any reason by giving the
Company prior written Notice of Termination (as defined in
paragraph 3(g)), which Notice of Termination shall be effective
not less than 90 days after it is given to the Company. Nothing
in this Agreement shall require the Executive to specify a
reason for any such termination. However, to the extent that
the procedures specified in paragraph 3(d) are required, the
procedures of this paragraph 3(e) may not be used in lieu of
the procedures required under paragraph 3(d).
(f) Termination by Company. The Company may terminate the
Executive's employment hereunder at any time for any reason, by
giving the Executive prior written Notice of Termination, which
Notice of Termination shall be effective immediately, or such
later time as is specified in such notice. The Company shall
not be required to specify a reason for the termination under
this paragraph 3(f), provided that termination of the
Executive's employment by the Company shall be deemed to have
occurred under this paragraph 3(f) only if it is not for
reasons described in paragraph 3(b), 3(c), 3(d), or 3(e).
(g) Notice of Termination. Any termination of the Executive's
employment by the Company or the Executive (other than a
termination pursuant to paragraph 3 (a)) must be communicated
by a written Notice of Termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" means
a dated notice which indicates the Date of Termination (not
earlier than the date on which the notice is provided), and
which indicates the specific termination provision in this
Agreement relied on and which sets forth in reasonable detail
the facts and circumstances, if any, claimed to provide a basis
for termination of the Executive's employment under the
provision so indicated.
(h) Date of Termination. "Date of Termination" means the last day
the Executive is employed by the Company, provided that the
Executive's employment is terminated in accordance with the
foregoing provisions of this paragraph 3.
(i) Effect of Termination. If, on the Date of Termination, the
Executive is a member of the Board of Directors of the Company
or any of the Subsidiaries, or holds any other position with
the Company and the Subsidiaries (other than the position
described in paragraph 1 (a)), the Executive shall resign from
all such positions as of the Date of Termination.
4. Rights Upon Termination. The Executive's right to payment and
benefits under this Agreement for periods after his Date of Termination shall
be determined in accordance with the following provisions of this paragraph 4:
(a) General. If the Executive's Date of Termination occurs during
the Agreement Term for any reason, the Company shall pay to the
Executive:
(i) The Executive's Salary for the period ending on the
Date of Termination.
(ii) Payment for unused vacation days, as determined in
accordance with Company policy as in effect from time
to time.
(iii) If the Date of Termination occurs after the end of a
performance period for the Annual Bonus, and prior to
the payment of the Annual Bonus (as described in
paragraph 2(b)) for the year, the Executive shall be
paid such bonus amount at the regularly scheduled time.
(iv) The Executive and any of his dependents shall be
eligible for medical continuation coverage under the
provisions of section 4980B of the Internal Revenue
Code or section 601 of the Employee Retirement Income
Security Act (sometimes called "COBRA coverage") to the
extent required by applicable law.
(v) Any other payments or benefits to be provided to the
Executive by the Company pursuant to any employee
benefit plans or arrangements adopted by the Company,
to the extent such amounts are due from the Company.
Except as may otherwise be expressly provided to the
contrary in this Agreement, nothing in this Agreement
shall be construed as requiring the Executive to be
treated as employed by the Company for purposes of any
employee benefit plan or arrangement following the date
of the Executive's Date of Termination.
(b) Death. If the Executive's Date of Termination occurs during the
Agreement Term by reason of the Executive's death, then, in
addition to the amounts payable in accordance with paragraph
4(a), the Executive's estate shall receive payment of the
Annual Bonus for the performance period in which his Date of
Termination occurs, based on actual performance for the entire
period, and payable at the same time as it is payable for other
participants in the Annual Bonus program; provided, however,
that it shall be subject to a pro-rata reduction for the
portion of the performance period following the Date of
Termination.
(c) Disability. If the Executive's Date of Termination occurs
during the Agreement Term under circumstances described in
paragraph 3(b) (relating to Executive's being Permanently
Disabled) then, in addition to the amounts payable in
accordance with paragraph 4(a):
(i) The Executive shall receive payment of the Annual Bonus
for the performance period in which his Date of
Termination occurs, based on actual performance for the
entire period, and payable at the same time as it is
payable for other participants in the Annual Bonus
Program; provided, however, that it shall be subject to
a pro-rata reduction for the portion of the performance
period following the Date of Termination.
(ii) If, at the Date of Termination under circumstances
described in paragraph 3(b), the Executive is not
eligible for income replacement benefits under the
Company's long-term disability plan or another
arrangement by the Company providing substantially
similar benefits, then, in lieu of receiving any
benefits under such plan or arrangement, the Executive,
for a period of two years after the Date of
Termination, shall continue to receive monthly or more
frequent payments at his salary rate in effect
immediately prior to the Date of Termination.
(d) Cause. If the Executive's Date of Termination occurs during the
Agreement Term under circumstances described in paragraph 3(c)
(relating to the Executive's termination for Cause) then,
except as otherwise expressly provided in this Agreement, the
Company shall have no obligation to make payments under the
Agreement for periods after the Executive's Date of
Termination.
(e) Resignation. If the Executive's Date of Termination occurs
during the Agreement Term under circumstances described in
paragraph 3(e) (relating to the Executive's resignation), then,
except as otherwise expressly provided in this Agreement, the
Company shall otherwise have no obligation to make payments
under the Agreement for periods after the Executive's Date of
Termination.
(f) Termination Without Cause and Constructive Discharge. If the
Executive's Date of Termination occurs during the Agreement
Term under circumstances described in paragraph 3(d) (relating
to Constructive Discharge) or paragraph 3(f) (relating to
termination by the Company without Cause) then, in addition to
the amounts payable in accordance with paragraph 4(a):
(i) The Executive shall receive, in a lump sum payment as
soon as practicable after the Termination Date, the sum
of:
(A) All of the salary that would be payable to the
Executive if he continued in the employ of the
Company until the End of the Severance Period (as
defined below) and received the rate of salary in
effect immediately prior to his Date of
Termination.
Plus
(B) The total Annual Bonus payments he would have
received if he remained in the employ of the
Company until the End of the Severance Period, with
the rate of bonus payment to be not less than the
greater of $500,000 per year or the highest Annual
Bonus payment received by the Executive from the
Company for his period of employment; provided that
if the End of the Severance Period occurs on a date
other than the last day of a performance period,
the Annual Bonus deemed to be earned under this
paragraph 4(f)(i)(B) for the performance period in
which the End of the Severance Period occurs shall
be the amount determined in accordance with this
paragraph 4(f)(i)(B) for the period, but subject to
a pro-rata reduction to reflect the portion of the
performance period following the End of the
Severance Period.
The "End of the Severance Period" shall be the date
that is the one-year anniversary of the date of
Termination.
(ii) The Company will provide the Executive with medical and
dental benefits with respect to the Executive and his
dependents to the extent that such benefits would have
been provided to the Executive (with respect to the
Executive and his dependents) under the Company's
medical and dental plans applicable to the Company's
senior executives (as those plans may be amended from
time to time in accordance with their terms) as though
the Executive remained employed by the Company until
the end of the Agreement Term. The period of coverage
under the foregoing provisions of this paragraph
4(f)(ii) shall be counted toward the Company's
obligation to provide COBRA coverage. The period of
coverage required under this paragraph 4(f)(ii) shall
cease as of the first day on which the Executive has
medical benefit coverage from his employer (including a
new employer or a prior employer) after the Date of
Termination. The Executive agrees that during any
period after the Date of Termination during which he is
eligible to obtain medical benefit coverage (with
respect to the Executive or his dependents) from the
Executive's employer, or other person to whom the
Executive provides service, the Executive will file
such an application, and take such other steps as may
be necessary to obtain such coverage (including the
payment of premiums).
In no event, however, shall the Executive be entitled
to receive any amounts, rights, or benefits under this
paragraph 4(f) unless he executes a release of claims
against the Company in a form prepared by the Company.
(g) Other Benefits. Except as may be otherwise specifically
provided in an amendment of this paragraph 4(g) adopted in
accordance with paragraph 10, the Executive's rights under this
paragraph 4 shall be in lieu of any benefits that may be
otherwise payable to or on behalf of the Executive pursuant to
the terms of any severance pay arrangement of the Company or
any Subsidiary or any other, similar arrangement of the Company
or any Subsidiary providing benefits upon involuntary
termination of employment.
5. Duties on Termination. Subject to the terms and conditions of this
Agreement, during the period beginning on the date of delivery of a Notice of
Termination, and ending on the Date of Termination, the Executive shall
continue to perform his duties as set forth in this Agreement, and shall also
perform such services for the Company as are necessary and appropriate for a
smooth transition to the Executive's successor, if any. Notwithstanding the
foregoing provisions of this paragraph 5, the Company may suspend the
Executive from performing his duties under this Agreement following the
delivery of a Notice of Termination providing for the Executive's resignation,
or delivery by the Company of a Notice of Termination providing for the
Executive's termination of employment for any reason; provided, however, that
during the period of suspension (which shall end on the Date of Termination),
the Executive shall continue to be treated as employed by the Company for
other purposes, and his rights to compensation or benefits shall not be
reduced by reason of the suspension.
6. Mitigation and Set-Off. The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise. The Company shall be entitled to set off
against amounts payable to the Executive any amounts owed to the Company by
the Executive, but the Company shall not be entitled to set off against the
amounts payable to the Executive under this Agreement any amounts earned by
the Executive in other employment after termination of his employment with the
Company, or any amounts which might have been earned by the Executive in other
employment had he sought such other employment.
7. Employee Agreement. As of the Employment Commencement Date, the
Executive shall enter into the "Employee Agreement," in the form set forth as
Supplement 1 to this Agreement, which is attached to and forms a part of this
Agreement.
8. Assistance with Claims. The Executive agrees that, for the period
beginning on the Employment Commencement Date, and continuing for a reasonable
period after the Executive's Date of Termination, the Executive will assist
the Company and the Subsidiaries in defense of any claims that may be made
against the Company and the Subsidiaries, and will assist the Company and the
Subsidiaries in the prosecution of any claims that may be made by the Company
or the Subsidiaries, to the extent that such claims may relate to services
performed by the Executive for the Company and the Subsidiaries. The Executive
agrees to promptly inform the Company if he becomes aware of any lawsuits
involving such claims that may be filed against the Company or any Subsidiary.
The Company agrees to provide legal counsel to the Executive in connection
with such assistance (to the extent legally permitted), and to reimburse the
Executive for all of the Executive's reasonable out-of-pocket expenses
associated with such assistance, including travel expenses. For periods after
the Executive's employment with the Company terminates, the Company agrees to
provide reasonable compensation to the Executive for such assistance. The
Executive also agrees to promptly inform the Company if he is asked to assist
in any investigation of the Company or the Subsidiaries (or their actions)
that may relate to services performed by the Executive for the Company or the
Subsidiaries, regardless of whether a lawsuit has then been filed against the
Company or the Subsidiaries with respect to such investigation.
9. Nonalienation. The interests of the Executive under this Agreement
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of
the Executive or the Executive's beneficiary.
10. Amendment. This Agreement may be amended or cancelled only by
mutual agreement of the parties in writing without the consent of any other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement or the
subject matter hereof.
11. Applicable Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Illinois, without regard
to the conflict of law provisions of any state. All disputes shall be
arbitrated or litigated (whichever is applicable) in Chicago, Illinois.
12. Severability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).
13. Waiver of Breach. No waiver by any party hereto of a breach of
any provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such
other party of any similar or dissimilar provisions and conditions at the same
or any prior or subsequent time. The failure of any party hereto to take any
action by reason of such breach will not deprive such party of the right to
take action at any time while such breach continues.
14. Successors, Assumption of Contract. This Agreement is personal to
the Executive and may not be assigned by the Executive without the written
consent of the Company. However, to the extent that rights or benefits under
this Agreement otherwise survive the Executive's death, the Executive's heirs
and estate shall succeed to such rights and benefits pursuant to the
Executive's will or the laws of descent and distribution; provided that the
Executive shall have the right at any time and from time to time, by notice
delivered to the Company, to designate or to change the beneficiary or
beneficiaries with respect to such benefits. This Agreement shall be binding
upon and inure to the benefit of the Company and any successor of the Company.
15. Notices. Notices and all other communications provided for in
this Agreement shall be in writing and shall be delivered personally or sent
by registered or certified mail, return receipt requested, postage prepaid
(provided that international mail shall be sent via overnight or two-day
delivery), or sent by facsimile or prepaid overnight courier to the parties at
the addresses set forth below (or such other addresses as shall be specified
by the parties by like notice). Such notices, demands, claims and other
communications shall be deemed given:
(a) in the case of delivery by overnight service with guaranteed
next day delivery, the next day or the day designated for
delivery;
(b) in the case of certified or registered U.S. mail, five days
after deposit in the U.S. mail; or
(c) in the case of facsimile, the date upon which the transmitting
party received confirmation of receipt by facsimile,
telephone or otherwise;
provided, however, that in no event shall any such
communications be deemed to be given later than the date they
are actually received. Communications that are to be delivered
by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:
to the Company:
Comdisco, Inc.
6111 N. River Road
Rosemont, Illinois 60018
with a copy to:
Michael A. Lawson, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071-3144
or to the Executive:
Michael Fazio
18 Hedgerow Lane
Greenwich, Connecticut 06831
with a copy to:
Aurora Cassirer, Esq.
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
All notices to the Company shall be directed to the attention
of the General Counsel of the Company, with a copy to the
Secretary of the Company. Each party, by written notice
furnished to the other party, may modify the applicable
delivery address, except that notice of change of address shall
be effective only upon receipt.
16. Arbitration of All Disputes. Any controversy or claim arising out
of or relating to this Agreement (or the breach thereof) shall be settled by
final, binding and non-appealable arbitration in Chicago, Illinois by three
arbitrators. Except as otherwise expressly provided in this paragraph 16, the
arbitration shall be conducted in accordance with the rules of the American
Arbitration Association (the "Association") then in effect. One of the
arbitrators shall be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two arbitrators. If
the first two arbitrators cannot agree on the third arbitrator within 30 days
of the appointment of the second arbitrator, then the third arbitrator shall
be appointed by the Association. This paragraph 16 shall not be construed to
limit the Company's or the Executive's right to obtain equitable relief under
the Employee Agreement with respect to any matter or controversy subject to
the Employee Agreement, and, pending a final determination by the arbitrator
with respect to any such matter or controversy, the Company and/or the
Executive shall be entitled to obtain any such relief by direct application to
state, federal, or other applicable court, without being required to first
arbitrate such matter or controversy.
17. Legal Costs.
(a) The Company shall reimburse the Executive for reasonable
attorneys' fees, costs and related expenses incurred in
connection with the negotiation and drafting of this Agreement.
(b) If, after the conclusion of the negotiation and drafting of
this Agreement, but before the Executive's termination of
employment or before the Executive has determined in good faith
that there exists a reasonable basis to conclude that the
Company may be in breach of this Agreement, the Executive
incurs attorneys' fees, costs and related expenses for the
interpretation and implementation of his rights under the
Agreement, subject to the approval of such reimbursement by the
Chairman of the Compensation Committee of the Company which
approval shall not be unreasonably withheld, the Executive
shall be reimbursed for such attorneys' fees, costs and related
expenses incurred for the interpretation and implementation of
his rights under the Agreement.
(c) To the extent the Executive incurs legal fees, costs, and
related expenses in a good faith effort to enforce his rights
under this Agreement (including the Supplements attached
hereto), at any time after Executive has a termination of
employment or at such time when the Executive has determined in
good faith that there exists a reasonable basis to conclude
that the Company may be in breach of this Agreement, the
Company shall reimburse Executive for any and all such legal
fees, costs, and related expenses.
18. Survival of Agreement. Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of the Executive's employment with the Company.
19. Entire Agreement. Except as otherwise noted herein, this
Agreement (including Supplement 1 attached hereto) constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior and contemporaneous agreements, if any, between the
parties relating to the subject matter hereof.
20. Acknowledgment by Executive. The Executive represents and
warrants that (i) he is not, and will not become a party to any agreement,
contract, arrangement or understanding, whether of employment or otherwise,
that would in any way restrict or prohibit him from undertaking or performing
his duties in accordance with this Agreement or that restricts his ability to
be employed by the Company in accordance with this Agreement; (ii) his
employment by the Company will not violate the terms of any policy of any
prior employer of the Executive regarding competition; and (iii) his position
with the Company, as described in this Agreement, will not require him to
improperly use any trade secrets or confidential information of any prior
employer, or any other person or entity for whom he has performed services.
21. Interest on Overdue Payments. If the Company fails to pay any
amount provided under this Agreement within thirty (30) days of the due date
of such amount, the Company shall pay interest on such amount at a rate equal
to the rate from time to time in effect under the Company's revolving credit,
and if such a rate is not available, then at a rate equal to two hundred (200)
basis points in excess of the prime commercial lending rate announced from
time to time by Citibank Bank, N.A.; provided however, that if the interest
rate determined in accordance with this paragraph 21 exceeds the highest
legally-permissible interest rate, then the interest rate shall be the highest
legally-permissible interest rate.
22. Compensation as Specified in this Agreement. Except as
specifically provided for in this Agreement (including the Supplement attached
hereto), the Executive shall not be entitled to any other compensation, equity
or other incentives, retirement benefits or other payments.
IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf
all as of the Effective Date.
/s/ Michael Fazio
___________________________
Michael Fazio
Comdisco, Inc.
By: /s/ Norman P. Blake, Jr.
_______________________
Its: Chairman and C.E.O.
Supplement 1
Employee Agreement
This Supplement 1 is attached to and forms a part of the employment
agreement (the "Agreement") between Michael Fazio (the "Executive") and
Comdisco, Inc. (the "Company") dated July 5, 2001, the Effective Date of the
Agreement. The purpose of this Supplement 1 is to set forth the following
"Employee Agreement."
EMPLOYEE AGREEMENT
I have entered into an employment agreement with Comdisco dated July
5, 2001, the Effective Date (the "Agreement"). As a condition of entering into
such Agreement, I have agreed to enter into this Employee Agreement, and
therefore I agree as follows:
1. Background. I acknowledge that Comdisco's Business (as defined
herein) is highly competitive, is marketed primarily to large and medium sized
companies nationally and internationally, involves long "lead times" often
exceeding one year to secure initial contracts, and requires ongoing,
comprehensive customer support.
2. Definitions. I understand that for purposes of this Employee
Agreement, the following definitions will apply:
2.1 "Comdisco" will mean Comdisco, Inc. or the Comdisco, Inc.
subsidiary, division or affiliate by whom I am employed, now or in the future.
2.2 "Comdisco's Business" shall mean (1) while I am employed by
Comdisco, any business in which Comdisco was engaged during the two-year
period immediately preceding that date (including, without limitation, any
business if Comdisco devoted material resources to entering into such business
during such two-year period), and (2) following the termination of my Comdisco
employment, any business in which Comdisco was engaged during the two-year
period immediately preceding the termination of my Comdisco employment
(including, without limitation, any business if Comdisco devoted material
resources to entering into such business during such two-year period).
2.3 "Confidential Information" will mean all trade secrets,
know-how or other confidential information not known to the public at large
that I obtained from Comdisco, or that I learned, discovered, developed,
conceived, originated or prepared in the scope of my Comdisco employment.
Confidential information includes, but is not limited to, information and
materials developed, collected or used by Comdisco personnel, and information
disclosed to Comdisco by Customers, potential Customers or third parties in
the course of a business relationship or proposed business relationship.
Confidential Information includes, but is not limited to, the following
general categories:
(1) information concerning Comdisco's operations,
organizational structure, methods, technology, procedures, finances,
accounting and legal matters;
(2) information concerning Comdisco's sales activities and
strategies, marketing activities and strategies, servicing activities and
strategies, bidding activities and strategies, product development activities
and strategies, expansion/acquisition or contraction/divestiture plans,
reorganization plans, and strategic business activities;
(3) information concerning Comdisco's past, present and
potential Customers, including the names, addresses, telephone numbers and
e-mail addresses of these Customers; the identities of individuals responsible
for buying products and services on behalf of these Customers; the needs and
buying tendencies of these Customers; contract negotiations between Comdisco
and these Customers; the contents and duration of contracts and agreement
between Comdisco and these Customers; financial and credit information
concerning these Customers' business operations; the identity, quantity and
prices of products and services purchased from Comdisco by these Customers;
and any Confidential Information regarding a Customer that I have learned in
the course of providing services to and/or for the Customer;
(4) vendor and supplier information, including the names,
addresses, telephone numbers and e-mail addresses of Comdisco's vendors and
suppliers; information regarding Comdisco's relationship with its vendors and
suppliers; contract negotiations between Comdisco and its vendors and
suppliers; the contents and duration of contracts and agreements between
Comdisco and its vendors and suppliers; financial and credit information
concerning its vendors and suppliers; and the identity, quantity and prices of
products and services purchased by Comdisco from its vendors and suppliers;
(5) information regarding Comdisco's pricing of its products
and services, including price lists, pricing policies and pricing strategies;
(6) employment and payroll data, including recruiting and
succession plans; and
(7) other information that Comdisco tells me is to be kept
confidential, or that I should reasonably deem to be kept confidential, or
that is designated as Confidential Information on an Attachment hereto.
Confidential Information may be contained on paper records, computer printouts
or disks, or other forms of documentation or media, but it need not
necessarily be reduced to a tangible form. Confidential Information does not
include information that, now or in the future, is available to the public
(other than through improper disclosure by me or another person) or
information rightfully acquired from a third party.
2.4 "Customer" will mean any person, firm or other business
entity which, during the two-year period immediately preceding the termination
of my Comdisco employment, (1) has contracted for any type of services or
equipment from or through Comdisco, or (2) has contacted Comdisco or been
contacted by Comdisco with respect to the availability or offering of
Comdisco's services or equipment and has requested or received a detailed
proposal or offer from Comdisco, or (3) was assigned to me, either directly or
indirectly, for account servicing or supervisory responsibilities (including,
without limitation, accounts where I participated in sales calls or conference
calls, and accounts for which I participated in sales strategy sessions
regarding the account, whether or not such sessions were conducted in
conjunction with representatives of the account).
3. Covenant Not to Disclose or Use Confidential Information. I
acknowledge that I have access to Confidential Information that must be
maintained in strict confidence in order for Comdisco to protect its business
and its competitive position in the marketplace. I acknowledge that it is
difficult to ascertain how long Confidential Information would remain useful
to Comdisco's competitors and potential competitors during my Comdisco
employment and thereafter, and that some Confidential Information may remain
useful to Comdisco's competitors for periods of indefinite duration.
Therefore, during my Comdisco employment and thereafter, except as required in
the performance of my duties to Comdisco, I will not directly or indirectly
publish or disclose any Confidential Information to any competitor or other
person outside Comdisco, and I will not remove from Comdisco premises or use
for my own benefit or otherwise appropriate or copy any Confidential
Information. This will apply whether or not I developed the Confidential
Information.
4. Covenant Not to Work for a Major Competitor.
4.1 Given the nature of Comdisco's Business, I recognize that
engaging in employment or other work for a major competitor would necessarily
and inevitably lead to my unauthorized use or disclosure of confidential
information. Accordingly, if I resign, or if Comdisco terminates my employment
due to poor job performance (as determined by Comdisco) or due to my criminal,
dishonest or improper behavior, then I will not directly or indirectly work
for any major Comdisco competitor in the Comdisco Business for a period of one
year after the termination of my Comdisco employment. This will include work
as an employee, officer, director, owner, shareholder, partner, associate,
consultant, advisor, contractor, joint venturer, manager, agent,
representative or salesperson. This will not apply to subsidiaries, divisions
or other units of a major Comdisco competitor which are not involved in the
Comdisco Business.
4.2 Upon termination of my Comdisco employment, at my request,
Comdisco will give me a list of its major competitors in the Comdisco
Business. I acknowledge that the major competitors of Comdisco in the Comdisco
Business currently include (without limitation) those listed on the
Attachment(s) hereto.
4.3 I understand that Comdisco may, in its discretion, consider
waiving this restriction completely or in part in unusual termination
situations. I recognize that any waiver would be based on the facts and
circumstances of the termination, and will not serve as a precedent for other
situations.
4.4 During my Comdisco employment, I will comply with Comdisco's
Conflicts of Interest Policy, as published in the Comdisco Code of Conduct,
and I will not engage in any business activity that is competitive with
Comdisco (unless agreed to by Comdisco in writing), and I will not take part
in any activities which would be detrimental to Comdisco's interests.
5. Covenant Regarding Customers.
5.1 During my Comdisco employment and for a period of one year
after the termination of my Comdisco employment for whatever reason, I will
not compete or attempt to compete with Comdisco for the sale or procurement of
services or equipment by or to any of the Comdisco Customers (or any person or
entity affiliated with them) with whom I had contact during the two-year
period preceding the termination of my Comdisco employment. "Competing"
includes, but is not limited to, accepting orders from a Customer, diverting a
Customer's business from Comdisco, disparaging Comdisco or its employees with
a Customer, or otherwise interfering with Comdisco's business with a Customer,
even if a Customer initiates contact with me.
5.2 During my Comdisco employment and for a period of one year
after the termination of my Comdisco employment for whatever reason, I will
not solicit or contact, directly or through other persons or entities, for the
purpose of competing with Comdisco's Business, any of the Comdisco Customers
(or any person or entity affiliated with them) with whom I had contact during
the two-year period preceding the termination of my Comdisco employment.
5.3 I acknowledge that Comdisco has a protectible business
interest in its relationships with its Customers, and in the continued loyalty
of its Customers. I acknowledge that Comdisco seeks to maintain and/or promote
its business with its Customers for an indefinite time period, even though
there are a number of competitors with which they could do business. I
acknowledge that I have had, and will have, contact with Comdisco's Customers
(and have developed my knowledge regarding their ongoing business needs)
primarily, if not exclusively, as a result of my employment with Comdisco.
6. Covenant Not to Solicit Employees. During my Comdisco employment
and for a period of one year after the termination of my Comdisco employment
for whatever reason, I will not (either directly or indirectly) employ,
solicit or endeavor to entice away from Comdisco (whether for my own business
or on behalf of another person or entity) any persons who are either employees
in the Comdisco Business or who have been employed by Comdisco within a
six-month period prior to my action.
7. Developments.
7.1 I agree that I will have no proprietary interest in any idea,
invention, design, technical or business innovation, computer program and
related documentation, or any other work product developed, conceived, or used
by me, in whole or in part, that arises out of my employment with Comdisco, or
that are otherwise made through the use of Comdisco's time, facilities or
materials (all collectively called "Developments"). I acknowledge that all
Developments are and will be the sole property of Comdisco, and that Comdisco
is not required to designate me as the author thereof. I will promptly
disclose all Developments to my manager, and will at Comdisco's request and
expense, do all things that may be necessary and appropriate to establish or
document Comdisco's ownership of the Developments (including, but not limited
to, the execution of the appropriate copyright or patent applications or
assignments).
7.2 I have identified at the end of this Employee Agreement all
inventions and other intellectual property in which I claim any right, title
or interest and which were made or conceived solely or jointly by me, or
written wholly or in part by me, but that have been neither published nor
filed in any patent or copyright office. If none is indicated, then I agree
that I do not have any to identify. (Note: It is in your interest to establish
that any of the above were made, conceived or written before the commencement
of your employment by Comdisco. You should not disclose them in detail, but
identify them only by titles and dates of documents describing them. If you
wish to interest Comdisco in any of them, you may contact the Board, who will
provide you with instructions for submitting them to Comdisco.)
8. Remedies.
8.1 I acknowledge that Comdisco has expended and continues to
expend substantial time, money and effort to: (1) develop proprietary and
commercially valuable Confidential Information and Developments; (2) locate
Customers and to establish and maintain long-term and near permanent business
relationships with them; and (3) recruit, train and compensate its work force.
I understand that it would be extremely difficult to measure the damages that
might result from any breach by me of this Employee Agreement, and that a
breach may cause irreparable injury to Comdisco that could not be compensated
by money damages. I agree that my commitments in this Employee Agreement are
supported by adequate consideration from Comdisco. Accordingly, Comdisco will
be entitled, in addition to any other rights and remedies it may have, to
specific performance and to a court order (without the posting of any bond)
prohibiting me (and any others involved) from breaching this Employee
Agreement. I consent to the jurisdiction and venue of any state or federal
court located in Illinois for any suit involving this Employee Agreement.
8.2 If a court decides that I have violated any provision of this
Employee Agreement, then I agree to pay any reasonable court costs, attorneys'
fees or litigation expenses incurred by Comdisco in enforcing this Employee
Agreement. If I violate paragraph 4, 5 or 6 of this Employee Agreement, then
the violated paragraph(s) will remain in force for one year after the
violation ends. I understand that this Employee Agreement will be construed
and enforced in accordance with Illinois law, without regard to its conflicts
of law rules. If a court decides that any part of this Employee Agreement is
not enforceable, then the rest of this Employee Agreement will not be
affected. If a court decides that any part of this Employee Agreement is too
broad, then the court may limit that part and enforce it as limited.
9. Business Opportunities. I acknowledge that the foregoing
restrictions will not unreasonably prevent me from obtaining gainful
employment in my occupation or field of expertise, or otherwise cause me undue
hardship. I agree that there are numerous other employment and business
opportunities available to me in the geographic area reasonably near my place
of residence that are not affected by these restrictions. I acknowledge that
these restrictions do not disproportionately benefit Comdisco, and are
reasonable and necessary in order to protect Comdisco's legitimate interests.
I acknowledge that Comdisco will rely on these restrictions now and in the
future in assigning duties and responsibilities to me. I agree to make this
Employee Agreement known to any prospective employers before accepting new
employment, and I understand that Comdisco may make this Employee Agreement
known to such prospective employers or other persons.
10. Confidential Information of Third Parties.
10.1 I confirm that I will not disclose to Comdisco, or use in
Comdisco's Business, or cause or induce others to use in Comdisco's Business,
any information or materials that are confidential to any third party (including
any of my prior employers and/or their customers) and that Comdisco does not
otherwise have the right to use. Without limiting the foregoing, I have signed
an agreement with this Pretzel Logic Software (a current or prior employer)
relating to confidential information. I can furnish Comdisco with a copy of this
agreement.
10.2 I will comply, and do all things necessary to permit
Comdisco to comply, with the laws and regulations of all governments under
which Comdisco does business, and with the provisions of contracts between
Comdisco and any such government or its contractors, or between Comdisco and
any private contractors, that relate to intellectual property or the
safeguarding of information, including the signing of any confidentiality
agreements required in connection with the performance of my duties during my
employment with Comdisco.
11. Non-Violation of Other Restrictive Covenants. I confirm that my
employment with Comdisco does not and will not violate any restrictive
covenant or similar contractual provision (including, but not limited to,
non-competition or non-solicitation obligations) that I may have agreed to or
am bound by with any prior employer or other third party. I confirm that I
have never been employed by or worked for SunGard Data Systems Inc. or any
related entity.
12. Duties Upon Termination of Employment.
12.1 I acknowledge that my termination of employment with
Comdisco shall be governed by the provisions of the Agreement.
12.2 Upon the termination of my Comdisco employment (or at any
other time if so requested), I agree to promptly deliver to Comdisco all
"Comdisco Materials," which include all assets, files, documents, business
records, notes, designs, data, software, manuals, equipment, keys, credit
cards, passwords, lists of Customers, and any other Comdisco-owned items of
any nature (regardless of the medium in which they are contained and
regardless of how they entered my possession or control) that are in my
possession or control, including materials that contain or are derived from
Confidential Information or Developments. I will retain no copies, excerpts or
summaries of any Comdisco Materials, nor will I make arrangements to place any
Comdisco Materials in the possession or control of another person or entity in
advance of my termination.
12.3 I understand that my responsibilities regarding Comdisco
Materials include an obligation to avoid undertaking or causing any "clean-up"
activities that might result in the loss of information of value to Comdisco.
I agree that I will not, in connection with or anticipation of the termination
of my Comdisco employment, throw out any documents or other Comdisco
Materials, nor will I attempt to delete, purge or clean out software files,
e-mails or any other intangible items on computer that I utilize in connection
with my work for Comdisco.
13. Miscellaneous. (13.1) By signing this Employee Agreement and
performing services for Comdisco, I will not, to the best of my knowledge, be
violating any other contract, agreement or understanding to which I am a
party. (13.2) Nothing in this Employee Agreement will be deemed to create,
either expressly or by implication, a contract of employment for a specific
period of time. (13.3) This Employee Agreement, together with the Agreement
(including the Supplements thereto) represents my entire understanding with
Comdisco on the subjects covered herein, and supersedes any prior
understandings or agreements. This Employee Agreement may be changed only by a
written agreement signed by an authorized Comdisco representative and me in
accordance with the amendment procedures under the Agreement. (13.4) This
Employee Agreement will benefit any successors or assigns of Comdisco, and
will bind my heirs, estate and personal and legal representatives. This
Employee Agreement is personal to me and I may not assign it. (13.5) If
Comdisco waives my breach of this Employee Agreement, this will not constitute
a waiver of any subsequent breaches. Any Comdisco waiver must be in writing
and signed by an authorized Comdisco representative.
I ACKNOWLEDGE THAT I HAVE READ THIS EMPLOYEE AGREEMENT IN ITS
ENTIRETY. I UNDERSTAND THAT THIS EMPLOYEE AGREEMENT IS LEGALLY ENFORCEABLE. I
ACKNOWLEDGE THAT I HAVE HAD THE OPPORTUNITY TO CONFER WITH ANYONE OF MY CHOICE
CONCERNING THIS EMPLOYEE AGREEMENT. BY SIGNING BELOW, I ACKNOWLEDGE THAT I AM
ENTERING THIS EMPLOYEE AGREEMENT VOLUNTARILY AND INTEND TO BE BOUND BY IT.
EMPLOYEE'S SIGNATURE: /s/ Michael Fazio
_________________
EMPLOYEE'S NAME: Michael Fazio
DATE SIGNED: July ____, 2001