THIS EMPLOYMENT AGREEMENT (THE
“AGREEMENT”) is effective the day of 4th September,
2009, by and between e Plus, inc. a Delaware
corporation (the “Company” or, collectively with its
subsidiaries, the “Companies”) and Phillip G. Norton
(the “Executive”).
RECITAL
The Executive is employed as the Company’s
President and Chief Executive Officer, and the parties have
negotiated this Agreement in consideration of the Executive’s
valuable services and expertise.
NOW THEREFORE, in consideration of the mutual
promises and covenants herein contained, the parties do hereby
agree as follows:
1. EFFECTIVE
DATE. This agreement shall be effective as of the date noted
above.
2.
DEFINITIONS. As used herein, the following terms shall have
the following meanings:
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(a)
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“Incapacity” shall mean the
Executive’s physical or mental inability to perform his
duties under this Agreement, even with reasonable accommodations
consistent with ADA requirements for more than sixteen (16) weeks,
whether or not consecutive, in any twelve-month period.
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(b)
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“ Employment Term” shall be the period from
September 4, 2009 through and including September 30,
2011.
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(c)
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“Expiration Date” means the date
that the Employment Term (as it may have been extended)
expires.
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(d)
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“Good
Cause” means that the Compensation Committee of the
Company’s Board of Directors (the “Board”) in
good faith determines that the Executive:
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i.
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Failed to
satisfactorily perform his duties to the Company and such
failure was not cured within 30 days of the Company’s
providing Executive written notice of such failure; or
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ii.
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Failed to
comply with a material written policy of the Company that was
applicable to the Executive and such failure was not cured within
30 days of the Company’s providing Executive
written notice of such failure; or
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iii.
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Acted or failed
to act in a manner that constitutes gross misconduct, embezzlement,
misappropriation of corporate assets, breach of the duty of
loyalty, fraud or negligent or willful violations of any laws with
which the Company is required to comply; or
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iv.
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Was convicted
of or entered a plea of “guilty” or “no
contest” to a felony;
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v.
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Refused or
failed to comply with lawful and reasonable instructions of the
Board and such refusal or failure was not cured within 30 days of
the Company providing Executive written notice of such refusal or
failure; or
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vi.
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Any other
material breach of this Agreement by the Executive that is not
cured within 30 days of the company providing Executive written
notice of such breach.
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“Good
Cause” shall not include failures as set forth in Section
2(d) of this Section when such failure is a result of the
Executive’s illness or injury.
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(e)
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“Good
Reason” shall mean that within thirty days prior to the
Executive’s providing the notice to the Company required
under Section 6(b)(ii) of this Agreement that any of the following
has occurred:
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i.
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a material
change in the scope of the Executive’s assigned duties and
responsibilities or the assignment of duties or responsibilities
that are inconsistent with the Executive’s level or position;
or
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ii.
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a reduction by
the Company in the Executive’s base salary as set forth
herein as may be increased from time to time or a reduction by the
Company in the Executive’s or incentive compensation;
or
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iii.
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a
change in the Executive’s principal office to a location
outside of a 35 mile radius from the Company’s offices in
Herndon, Virginia; or
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iv.
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the
failure by the Company to continue to provide the Executive with
benefits substantially similar to those specified in Section 5 of
this Agreement.
a termination
of employment by the Executive for any reason during the 90-day
period immediately following a Change of Control as “Change
of Control” is defined in the 2008 Employee Long-Term
Incentive Plan.
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vi.
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Any other
material breach of this Agreement by the Company that is
not cured within 30 days of the Executive providing the Company
written notice of such breach.
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(f)
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“Termination Date” shall mean the
date Executive’s termination is effective, as described in
the respective subparts of Section 6.
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3.
EMPLOYMENT
The Company and Executive hereby agree to employ
the Executive as set forth herein during the Employment Term and
until Executive’s employment terminates pursuant to Section 6
below.
4. POSITION,
DUTIES AND RESPONSIBILITIES. During the Employment Term, the
Executive shall:
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a.
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serve as the
Company’s Chief Executive Officer and President. The
Executive shall be responsible for, but not limited to, the
following areas: Providing overall strategic and
operational direction; establish policies and objectives in
accordance with board directives and corporate charter; revise
objectives and policies in response to change in current internal
and external conditions; coordinate operations between divisions
and departments; establish responsibilities and procedures for
attaining objectives; review operations and financial statements to
evaluate achievement of objectives; work with the board of
directors to develop policies and procedures regarding overall
direction of the business;
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b.
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render such
other services to the Company as requested provided that such
services are consistent with the level of his position;
and
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c.
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devote his
substantially full business time, attention, skill and energy to
the business of the Company and not engage or prepare to engage in
any other business activity, whether or not such business activity
is pursued for gain, profit or other economic or financial
advantage, except as otherwise provided herein. Executive may
engage in appropriate civic, charitable, or educational activities
provided that such activities do not materially interfere or
conflict with the Executive’s responsibilities or the
Company’s interests. Nothing in this Agreement
shall preclude Executive from acquiring or participating in the
management of any real estate investment or any passive
investment in a private company not in the same line of
business as the company, or any publicly traded
securities.
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5. COMPENSATION,
COMPENSATION PLANS AND BENEFITS. During the Employment Term,
the Executive shall be compensated as follows:
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a.
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Executive shall
receive a base annual salary of Five Hundred Thousand Dollars
($500,000). The salary will be reviewed by the
Company’s Compensation Committee on an annual basis,
beginning no later than October 1, 2009, and may be increased from
time to time. This base annual salary rate shall be
effective as of the date of this agreement.
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b.
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Based on his
MBOs and overall company performance the Executive shall be
eligible to be considered for an annual bonus of up to 50% of his
base salary then in effect under the terms and conditions as
outlined in the Executive Incentive Plan . The
Company shall pay any bonus earned under this Section 5(b) no
earlier than the end of the fiscal year for which earned and no
later than the next September 30 th following the Fiscal year in which the bonus was
earned, provided that financial filings are timely provided to the
Compensation Committee. In no event will any bonus earned under
this Section 5(b) be paid later than the end of the fiscal year
after the fiscal year for which it was earned.
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c.
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The Executive
shall be entitled to participate in and receive other benefits
offered by the Company, including six weeks of vacation per
year. Other benefits will include, but are not limited
to, those offered to employees generally, which may include, but
are not limited to sick, holiday and other leave times, and
benefits under any life, health, accident, disability, medical, and
dental insurance plans.
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d.
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The Executive
shall be entitled to be reimbursed for the reasonable and necessary
out-of-pocket expenses, including entertainment, travel and similar
items and all expenses necessary to maintain his professional,
industry association memberships incurred by him in performing his
duties, in accordance with the Company’s expense
reimbursement policies in place from time to time. Any
reimbursements which are includible in gross income of the
Executive under this Section 5(d) or Section 5(g) must meet the
following conditions. Such reimbursements: (i) must be
for expenses incurred during the term of this Agreement; (ii) shall
not be subject to liquidation or exchange for any other benefit;
(iii) shall not affect eligibility for reimbursements in any other
taxable year of the Executive; and (iv) shall be made no later than
the last day of the Executive’s taxable year following the
taxable year in which the expense was incurred.
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e.
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In the event
Executive’s employment with Company terminates for any
reason, any payments and benefits due the Executive under the
Company’s employee benefit plans and programs, including any
Long-Term Incentive Plan, shall be determined in accordance with
the terms of such benefit plans and programs, and shall be in
addition to any other payments or benefits herein.
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f.
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In the event
the Executive’s employment with the Company terminates for
any reason, the Executive shall have the right to have any term
insurance policies that the Company then owns on his life assigned
to him, provided that he pay to the Company the amount of premiums
previously paid for life insurance coverage subsequent to the date
of assignment (“the unearned premium”). If
Executive elects to have the policy so assigned, he must notify the
Company and pay the unearned premium within sixty days of
termination of his employment with the Company.
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g.
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Not more than
once every year, the Executive shall be entitled to be reimbursed
by the Company for his participation in the Johns Hopkins Executive
Physical Program or equivalent.
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6.
TERMINATION OF EMPLOYMENT
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Termination by
the Company.
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i.
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During the
Employment Term, the Company may terminate the Executive’s
employment for Good Cause. In the absence of cure by the
Executive as per Section 2(d), termination by the Company for Good
Cause shall be effective on the thirty-first day
after the Company gives written notice to the Executive
of failure to perform.
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ii.
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During the
Employment Term, the Company may terminate the Executive’s
employment at any time without Good Cause upon the Company’s
payment to the Executive for the 30 days’ written notice
period to the Executive or 30 days’ pay in lieu of such
notice. Termination is effective 30 days after the date
the written notice is provided to the Executive. The Company may,
in its sole discretion, place the Executive on paid administrative
leave as of any date prior to the end of the 30-day notice period
and require that the Executive no longer be present on Company
premises. During any period of paid administrative
leave, the Executive is not authorized to act or speak as a
representative of the Company.
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Termination by
Executive.
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i.
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During the
Employment Term, the Executive may voluntarily terminate his
employment for any reason with the Company upon 30 days prior
notice. Termination is effective 30 days after the date the notice
is provided to the Company. The Company may, in its sole
discretion, place the Executive on paid administrative leave as of
any date prior to the end of the 30-day notice period and require
that the Executive no longer be present on Company
premises. During any such period of paid administrative
leave, the Executive is not authorized to act or speak as a
representative of the Company.
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ii.
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During the
Employment Term, the Executive may terminate his employment for
Good Reason as defined in Section 2(e) only if the Executive
has provided the Board with written notice of his intent to
terminate his employment for Good Reason at least 10 days prior to
the date of termination, and the Company fails to cure the Good
Reason within 10 business days after receiving Executive’s
written notice. Termination for Good Reason will be
effective on the 11 th
day after the Company receives
Executive’s written notice and fails to cure the Good Reason
identified in Executive’s notice.
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c.
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Termination by Reason of Death or
Incapacity.
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Executive’s employment with the Company
shall be deemed to have been terminated effective upon the date of
Executive’s death, or the date upon which the Company
provides Executive with notice of Incapacity.
If the
Employment Term ends without the parties’ entering into a new
employment agreement or extending the Employment Term of this
Agreement, the Executive’s employment with the Company shall
continue on an at will basis and either the Company or the
Executive may terminate his employment at any time for any reason
or no reason upon 30 days’ written notice. The
Company may choose to end the employment relationship at any time
during any such notice period, provided that the Company pays the
Executive for the balance of such notice period.
7. EFFECT OF
TERMINATION.
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a.
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If the
Executive’s employment ends at any time (during or after the
Employment Term) for any reason, the Company shall pay the
Executive his then current base salary and provide the Executive
his then current benefits (as provided in Section 5) through the
Termination Date.
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b.
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If during the
Employment Term the Executive’s employment terminates by
reason of death as described in Section 6(c), the Company shall
also pay the Executive’s estate any bonus as determined by
the Compensation Committee in accordance with the Company’s
Executive Incentive Plan. Pursuant to the Executive
Incentive Plan, the Compensation Committee will determine the
amount of such bonus, if any, and such amount, if any, will be paid
within sixty (60) days of the termination of Executive’s
employment.
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c.
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Provided that
after the Termination Date the Executive (i) signs in the form
provided by the Company a release of any claims Executive may have
against the Company or its then current or former officers,
directors, or employees (attached hereto as Exhibit 1) and (ii)
certifies that the Executive has complied with Sections 8, 9,
10, 11 and 12 of this Agreement (confidentiality,
intellectual property, non-compete, non-solicit, conflict of
interest and return of property provisions), then:
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1) If during the Employment Term the
Executive’s employment is terminated by reason of Incapacity
as described in Section 6(c), the Company shall also pay the
Executive any bonus as determined by the Compensation Committee in
accordance with the Company’s Executive Incentive Plan for
the fiscal year that includes the Termination Date, and an
additional amount equal to eighteen months of the Executive’s
base salary. The payment of the amount equal to eighteen
months of the Executive’s base salary shall be made with
thirty (30) days of termination of employment. Pursuant
to the Executive Incentive Plan, the Compensation Committee will
determine the amount of such bonus, if any, and such amount, if
any, will be paid within sixty (60) days of the termination of
Executive’s employment.
2) If, during the Employment Term,
either the Company terminates Executive’s employment without
Good Cause as described in Section 6(a) or Executive terminates his
employment for Good Reason, as described in Section
6(b)(ii), then (a) the Company shall also pay Executive an
amount equal to eighteen months of the Executive’s base
salary and the target bonus as set forth in the Executive’s
then-current Executive Incentive Plan; and (b) provided that the
Executive remains eligible for and timely elects to continue his
and any eligible dependants health benefits under COBRA, the
Company shall also pay to the insurer the amount necessary for the
Executive to continue medical and dental insurance for himself and
his dependants through COBRA for a period of eighteen months after
the Termination Date. Should the Executive or any of his
dependants become covered under another employer’s health
benefit plan before the end of the eighteen month period, the
Company will have no obligation to continue making such additional
payments to the insurer. The Executive shall not be
obligated in any way to mitigate the Company’s obligations to
him under this Section and any amounts earned by the Executive
subsequent to his termination shall not serve as an offset to the
payments due him by the Company under this Section. Any payment due
under this section 7(c)(2) shall be made in a lump sum within
thirty (30) days following the termination of
employment.
3) If the parties have not entered
into a new e
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