<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 21, 1998
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Tekgraf, Inc.
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(Exact name of registrant as specified in its charter)
Georgia 000-23221 58-2033795
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
6000 Lake Forrest Drive, Suite 110, Atlanta, Georgia 30328
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 252-0201
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N/A
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(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events.
On October 23, 1998, Tekgraf, Inc. (the "Company") entered
into a Severance Agreement and General Release (the "Severance Agreement") with
Phillip C. Aginsky, who has been the Chairman and Chief Executive Officer of
the Company since its inception in June of 1997. Pursuant to the terms of the
Severance Agreement, Mr. Aginsky resigned from his positions as Chairman and
Chief Executive Officer of the Company, resigned from the Board of Directors of
the Company (the "Board"), and resigned from all positions held with the
Company's subsidiaries. The Severance Agreement provides that Mr. Aginsky will
continue to serve the Company as a consultant until December 31, 1999. As
compensation for his services as a consultant, the Company will continue to pay
Mr. Aginsky his current salary, part of which was paid in a lump sum on the
date of the Severance Agreement, and will also pay him amounts sufficient to
maintain his current health, life and disability benefits. The Severance
Agreement supercedes Mr. Aginsky's employment agreement with the Company, dated
June 2, 1997, although Mr. Aginsky will continue to be bound by, among other
things, the confidentiality and non-solicitation provisions of that employment
agreement. During the three-year period following the date of the Severance
Agreement, Mr. Aginsky will have the right to nominate a person, other than
himself, to the Board, but may exercise this right only once during that
three-year period. The Severance Agreement also provides for various releases
from liability by the parties. The Board has appointed William M. Rychel,
President of the Graphics Division of the Company and a Member of the Board, to
serve as the interim Chief Executive Officer.
On October 21, 1998, in accordance with the terms of the
Severance Agreement, Martyn L. Cooper and J. Thomas Woolsey resigned from their
positions as members of the Board. The Board appointed W. Jeffrey Camp, Chief
Financial Officer of the Company, to fill a vacancy on the Board.
Item 7. Exhibits.
(c) Exhibits.
10.1 Severance Agreement and General Release, dated October
23, 1998.*
99.1 Press release dated October 26, 1998.
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* Confidential treatment has been requested for certain confidential portions
of this exhibit pursuant to Rule 24(b)(2) under the Exchange Act. In accordance
with Rule 24(b)(2), these confidential portions have been omitted from this
exhibit and filed separately with the Commission.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Tekgraf, Inc.
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(Registrant)
By: /s/ W. Jeffrey Camp
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W. Jeffrey Camp
Chief Financial Officer
Date: November 11, 1998
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<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Description
<S> <C>
10.1 Severance Agreement and General Release, dated October 23, 1998.*
99.1 Press release dated October 26,1998.
</TABLE>
- -----------------------------
* Confidential treatment has been requested for certain confidential portions
of this exhibit pursuant to Rule 24(b)(2) under the Exchange Act. In accordance
with Rule 24(b)(2), these confidential portions have been omitted from this
exhibit and filed separately with the Commission.
<PAGE> 1
EXHIBIT 10.1
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
SEVERANCE AGREEMENT
AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL RELEASE (this "Agreement") of
claims is entered into by and between Tekgraf, Inc., a Georgia corporation
("Tekgraf"), its predecessors, successors, subsidiaries, affiliates, officers,
directors, agents, attorneys, employees, and assigns (hereafter, including
Tekgraf, collectively referred to as "Releasees"), on the one hand, and Phillip
C. Aginsky ("Aginsky"), on the other hand.
W I T N E S S E T H:
WHEREAS, Aginsky is employed by, and served, Tekgraf and its
subsidiaries as an officer and director;
WHEREAS, the parties mutually desire to terminate their employment
relationship; and
WHEREAS, the parties wish to preserve the good will which exists
between them, to recognize the significant contribution that Aginsky has made
to Tekgraf, and to settle all disputes which may exist between them.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. RESIGNATIONS. Aginsky hereby resigns, effective immediately, from the
following positions: Chairman of Tekgraf, Chief Executive Officer of Tekgraf,
member of the Board of Directors of Tekgraf (the "Board"), member of the Audit
Committee of the Board and member of the Compensation Committee of the Board.
Mr. Aginsky also hereby resigns from all his positions as a director and
officer of each of the subsidiaries of Tekgraf (including, without limitation,
the positions listed on Exhibit A attached hereto), and hereby resigns from any
and all positions with Tekgraf and any of its subsidiaries that are not herein
identified.
2. CONSULTING SERVICE. Pursuant to the terms of this Agreement, Aginsky
hereby agrees to continue to provide services to Tekgraf as a consultant until
December 31, 1999. Aginsky shall cease reporting to work after the date hereof.
Aginsky shall thereafter make himself reasonably available by telephone for
consultation with the independent directors, the Chief Financial Officer or the
Permanent CEO (as hereinafter defined) (collectively, the "Identified Parties")
as needed and upon reasonable notice from the Board through December 31, 1999;
provided, however, such consultation shall be limited to no more than five (5)
hours per week. Aginsky shall have no obligation to provide consulting services
in excess of the foregoing, however, should Aginsky provide such services in
excess of five (5) hours, Aginsky shall be paid for such services at the rate
of $250.00 per hour to the extent that Aginsky has a written purchase order
signed by an Identified Party before performing the work, such payment to be
included in the next regularly scheduled payment pursuant to this Agreement.
The right to payments under the terms of this Agreement shall survive the
incapacity, disability or death of Mr. Aginsky. Aginsky hereby agrees to
terminate his consulting relationship with Tekgraf on December 31, 1999. After
that date, Tekgraf will have no obligation to employ Aginsky or to enter into
any service or consulting agreements with Aginsky.
<PAGE> 2
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
3. PAYMENT FOR CONSULTING SERVICES AND OTHER MATTERS. Upon execution of
this Agreement, Tekgraf shall pay to Aginsky (i) the sum of $36,458, less all
withholding, which represents fifty percent (50%) of the salary to which
Aginsky would be entitled between November 1, 1998 and May 31, 1999, were his
employment agreement to remain in effect during that time, and (ii) an amount
equal to $1,500.00 for all unreimbursed out-of-pocket expenses incurred by
Aginsky prior to the date hereof. Beginning on November 1, 1998 and continuing
through December 31, 1999, Tekgraf will pay Aginsky a monthly sum of $7,812,
less all withholding, which represents the remaining 50% of the aforementioned
amount plus, in part, fees for services from June 1, 1999 to December 31, 1999.
Through October 31, 1998, Mr. Aginsky will continue to be paid his salary in
the manner and amounts in which such salary was being paid prior to the date
hereof.
4. BENEFITS.
(a) Because Aginsky will work as an independent contractor and because
Aginsky will be obligated to work only for such periods, not to exceed
5 hours per week, as may be required by the Board through the
Identified Parties, Aginsky may no longer be eligible to participate
in Tekgraf's employee benefit plans. Accordingly, Tekgraf shall pay to
Aginsky and his immediate family monthly in advance an amount
sufficient to pay all Cobra premiums for health, life and disability
programs comparable to the Tekgraf programs in which Aginsky and his
immediate family are participating at the time of this Agreement
through the earlier of: (i) the date on which Aginsky enters into an
employment or consulting relationship with another entity on a
full-time basis, ****, or (iii) December 31, 1999.
(b) Aginsky will not continue to participate in Tekgraf's 401k plan, and
Aginsky will not be eligible to receive any other payments or benefits
from Tekgraf with respect to his role as an employee or consultant,
other than those expressly set forth in this Agreement.
5. OTHER RESIGNATIONS. Upon execution of this Agreement, Messrs. Martyn
Cooper and J. Thomas Woolsey will tender their resignations from the Board
effective as of the date hereof. On the date hereof, the Board will be reduced
to six members, with one vacancy. The Board will consist of: Bill Rychel, W.
Jeffrey Camp, Mr. Frank X. Dalton, Jr., Mr. Albert E. Sisto and Dan I. Bailey.
Upon the hiring of the Permanent CEO (as hereinafter defined), the Permanent
CEO shall become the sixth member. The Board shall immediately establish and
appoint a committee of independent directors, initially consisting of Messrs.
Dalton and Sisto (the "Independent Committee") for the purpose of hiring a
permanent CEO in Paragraph 7. Nothing herein shall prohibit the Company or
Board from expanding the Board.
6. RIGHT TO NOMINATE DIRECTOR. Tekgraf shall use its best efforts to
cause a nominee of Aginsky (so long as such nominee is not Aginsky) to be
elected to the Board; provided, however, that such nominee must have
qualifications suitable for a director of Tekgraf and that said nomination will
be subject to the approval of the independent directors of the Board at the
time of Aginsky's submission of the nominee. If the independent directors
approve the presentation of the nominee to the shareholders, each then current
member of the Board shall agree to vote for approval of that nominee at the
annual meeting. This nominee shall serve for a one-year term and Aginsky shall
not have any right to nominate nor re-nominate any candidate following the
initial one-year term of his nominee pursuant to this Agreement. Aginsky shall
have the aforementioned opportunity to present such a nominee only once and
must utilize this opportunity within the three-year period following the date
of this Agreement. Should for any reason, the Board fail to nominate Aginsky's
nominee, the right of Aginsky pursuant to this
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**** Omitted pursuant to a request for confidential treatment and
filed separately with the Commission.
<PAGE> 3
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
Section shall remain in effect and at the next vote of Board Members,
Aginsky may repropose so long as this Agreement is in effect.****
7. HIRING OF PERMANENT CHIEF EXECUTIVE OFFICER. The Board shall promptly
engage an independent search firm to assist the Board in the identification of
a permanent chief executive officer (the "Permanent CEO") with the intent that
such Permanent CEO be in place as soon as practicable. The hiring of such a
search firm shall not preclude the Board from considering candidates who are
introduced by persons who were members of the Board immediately prior to the
execution of this Agreement. Beginning on the date hereof and continuing until
a Permanent CEO has been chosen, Mr. William Rychel shall serve as the acting
chief executive officer of Tekgraf (the "Interim CEO"). The Interim CEO shall
serve at the pleasure of the Independent Committee. It is the current intent of
Tekgraf to hire a CEO, other than the Interim CEO, however, Tekgraf reserves
the right to ultimately continue with the Interim CEO.
8. PUBLIC COMMUNICATIONS. Aginsky and the Board recognize and agree that
a number of communications, both to the public and to employees, need to be
made for the advancement of the best interests of Tekgraf. **** Secondly,
Tekgraf will need to satisfy the disclosure obligations imposed upon it by the
securities laws and all other applicable laws, rules and regulations relating
to this Agreement. The forms of such communications, to the extent that such
communications address Aginsky's relationship with Tekgraf, shall be reasonably
acceptable to Aginsky; provided, however, that Aginsky shall in no way be
entitled to delay any such communications and that Aginsky shall not have any
input with respect to the content of documents filed by, or communications made
by, Tekgraf pursuant to the legal obligations of Tekgraf arising under the
securities laws and the rules and regulations promulgated thereunder or
pursuant to any future lawsuit relating to Aginsky. In addition, the Company
shall issue a press release in the form of Exhibit B to this Agreement.
9. NO FURTHER AUTHORITY TO BIND TEKGRAF. Aginsky agrees that he will no
longer have authority to bind or represent Tekgraf or its subsidiaries after
the execution of this Agreement and agrees that he will not hold himself out as
able to bind, or execute agreements upon behalf of Tekgraf or its subsidiaries
in any manner whatsoever.
10. RETURN OF PROPERTY.
(a) Aginsky expressly agrees that he will
immediately return to Tekgraf all property, documents and
materials of whatever kind and in whatever form, which are
owned by Tekgraf or its subsidiaries, including, without
limitation, the property of all subsidiaries of Tekgraf.
Aginsky further agrees that he will immediately return and
will leave with Tekgraf, all property, documents and
materials of whatever kind and in whatever form that were
produced by or on behalf of Tekgraf or its subsidiaries.
Aginsky further agrees to return and leave with Tekgraf all
documents and materials he produced or received during the
course of and as a result of his employment with Tekgraf or
any of its predecessors and subsidiaries, including, but not
limited to, keys, customer lists, credit cards and software.
Tekgraf is not aware of any property, documents or materials
currently believed to be held by Aginsky, but Aginsky
acknowledges that Tekgraf has not performed an audit or
attempted to determine what property may be missing at this
time.
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**** Omitted pursuant to a request for confidential treatment and
filed separately with the Commission.
<PAGE> 4
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
(b) Notwithstanding the foregoing, the Company will provide
reasonable access to the property of the Company and its
subsidiaries to Mr. Aginsky or his representative to retrieve
any property of a personal nature within five (5) days of the
date of this Agreement, so long as Aginsky is accompanied by
the CFO when entering any premises of the Company or its
subsidiaries. In addition, the Company and each subsidiary
hereby covenants and agrees to promptly (not less frequently
than weekly) forward to Mr. Aginsky in an unopened state any
mail or other correspondence addressed to Mr. Aginsky
personally (i.e., not identifying Mr. Aginsky on the face
thereof as Chairman or CEO of the Company).
11. RELEASE BY AGINSKY.
(a) Aginsky hereby forever fully releases, remises, acquits, and
discharges Releasees and covenants not to sue or otherwise
institute or cause to be instituted or in any way participate
in (except at the request of Tekgraf) legal or administrative
proceedings against Releasees with respect to any matters
arising from or related to Aginsky's relationship to Tekgraf
and its subsidiaries prior to the date of this Agreement,
including, but not limited to, any matter arising out of or
connected with his employment with Tekgraf or any subsidiary
or the termination of that employment, including any and all
liabilities, claims, demands, contracts, debts, obligations,
and causes of action of every nature, kind, and description,
in law, equity, or otherwise, whether or not now known or
ascertained, which heretofore do or may exist; provided,
however, that this release is not intended to and does not,
release waive, or alter in any way any liability Tekgraf or
any Releasee may have arising out of or related to: (w) this
Agreement, (x) claims which Alongal Extrusions, Inc.
("Alongal") may have in common (except as to the amount of
damages, if any) with other shareholders of Tekgraf, and, (y)
claims as to which Aginsky is entitled to for indemnification
from Tekgraf or any subsidiary pursuant to Directors' and
Officers' insurance, if any, or (z) the stock purchase
agreements to which the to which Aginsky was a party (all
such stock purchase agreements are dated May 1, 1997 and were
amended on June 2, 1997), escrow agreements or related
documents executed by and among: (i) Crescent Computers, Inc.
(a predecessor entity to Tekgraf), its shareholders,
Microsouth, Inc. and its shareholders; (ii) Crescent
Computers, Inc., its shareholders, Tekgraf, Inc. and its
shareholders; (iii) Crescent Computers, Inc., its
shareholders, G&R Marketing, Inc. and its shareholders; (iv)
Crescent Computers, Inc., its shareholders, Computer Graphics
Distributing Company and its shareholders; and, (v) Crescent
Computers, Inc., its shareholders, Intelligent Products
Marketing, Incorporated, its shareholders, and IG
Distributing, Inc., and its shareholders.
(b) Aginsky waives any rights he may have had or now has to
pursue any and all remedies available to him under any cause
of action against any of the Releasees as to any matter
whatsoever, including, but not limited to, any matter arising
out of or connected with his employment with Tekgraf or any
subsidiary, including without limitation, claims of wrongful
discharge, emotional distress, defamation, breach of
contract, breach of the covenant of good faith and fair
dealing, the Employee Retirement Income Security Act, and any
other laws and regulations relating to employment, including
any and all employment laws of the state of Georgia or, if
applicable, Delaware. Aginsky further acknowledges and
expressly agrees that he is waiving any and all rights he may
have had or now has to pursue any claim of discrimination,
including but not limited to, any claim of discrimination
based on sex, age, race, national origin, disability, or on
any other basis, under Title VII of the Civil Rights Act of
1964, the Americans with Disabilities Act of
<PAGE> 5
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
1990, the Equal Pay Act of 1963, the Age Discrimination in Employment
Act of 1967, the Civil Rights Act of 1866, any other analogous law of
the state of Georgia or, if applicable, Delaware, and all other laws
and regulations relating to employment; provided, however, that this
release is not intended to and does not, release waive, or alter in
any way any liability Tekgraf or any Releasee may have arising out of
or related to: (w) this Agreement, (x) claims which Alongal may have
in common (except as to the amount of damages, if any) with other
shareholders of Tekgraf, (y) claims as to which Aginsky is entitled to
for indemnification from Tekgraf or any subsidiary pursuant to
Directors' and Officers' insurance, if any, or (z) the stock purchase
agreements to which Aginsky was a party (all such stock purchase
agreements are dated May 1, 1997 and were amended on June 2, 1997),
escrow agreements or related documents executed by and among: (i)
Crescent Computers, Inc. (a predecessor entity to Tekgraf), its
shareholders, Microsouth, Inc. and its shareholders; (ii) Crescent
Computers, Inc., its shareholders, Tekgraf, Inc. and its shareholders;
(iii) Crescent Computers, Inc., its shareholders, G&R Marketing, Inc.
and its shareholders; (iv) Crescent Computers, Inc., its shareholders,
Computer Graphics Distributing Company and its shareholders; and, (v)
Crescent Computers, Inc., its shareholders, Intelligent Products
Marketing, Incorporated, its shareholders, and IG Distributing, Inc.,
and its shareholders.
12. RELEASE BY TEKGRAF. Tekgraf and each Subsidiary hereby forever fully
releases, remises, acquits, and discharges Aginsky and covenants not to sue or
otherwise institute or cause to be instituted or in any way participate in
(except at the request of Aginsky) legal or administrative proceedings against
Aginsky with respect to any matters relating to or arising from or related to
Aginsky's relationship to Tekgraf and its subsidiaries prior to the date of
this Agreement, including, without limitation, any matter arising out of
Aginsky's employment as an officer of Tekgraf or any subsidiary and, to the
fullest extent permitted by applicable law, including any and all liabilities,
claims, demands, contracts, debts, obligations, and causes of action of every
nature, kind, and description, in law, equity, or otherwise, whether or not now
known or ascertained, which arose out of Aginsky's position as an officer of
Tekgraf or any subsidiary; provided, however, that this release is not intended
to, and does not, release, waive, or alter in any way, any liability Aginsky
may have in his individual capacity and not as an officer of Tekgraf or any
subsidiary arising out of or related to (v) the stock purchase agreements to
which Aginsky was a party (all such stock purchase agreements are dated May 1,
1997 and were amended on June 2, 1997), escrow agreements or related documents
executed by and among: (i) Crescent Computers, Inc. (a predecessor entity to
Tekgraf), its shareholders, Microsouth, Inc. and its shareholders; (ii)
Crescent Computers, Inc., its shareholders, Tekgraf, Inc. and its shareholders;
(iii) Crescent Computers, Inc., its shareholders, G&R Marketing, Inc. and its
shareholders; (iv) Crescent Computers, Inc., its shareholders, Computer
Graphics Distributing Company and its shareholders; and, (v) Crescent
Computers, Inc., its shareholders, Intelligent Products Marketing,
Incorporated, its shareholders, and IG Distributing, Inc., and its
shareholders, or (w) Aginsky in his capacity as a Director, or (x) pursuant to
Sections 7-11 of his Employment Agreement, or (y) release any claims of any
other Releasee other than Tekgraf or its subsidiaries; or (z) from any claim
brought by Alongal or Dan Bailey or any affiliates of either, which may have
been the fault of Aginsky.
13. AGINSKY LEGAL FEES. Upon execution of this Agreement, Tekgraf will pay
Aginsky's reasonable attorneys' fees actually incurred, up to a maximum amount
of $10,000, incurred in connection with the negotiation and execution of this
Agreement and in connection with the negotiation and execution of any other
documents executed in connection herewith; ****
- ----------------------
**** Omitted pursuant to a request for confidential treatment and
filed separately with the Commission.
<PAGE> 6
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
14. NO FURTHER PAYMENTS. Upon execution of this Agreement, the only
payments and benefits that Aginsky is entitled to receive from Tekgraf relating
to the matters addressed herein are those specified in this Agreement.
15. TERMINATION OF EMPLOYMENT AGREEMENT. This Agreement supersedes the
June 2, 1997 employment agreement between the parties, which Employment
Agreement has hereby been terminated, except that Aginsky will remain bound by
the provisions of Sections 7, 8 and 12 of that Employment Agreement. Aginsky
further agrees that he will remain bound by the provisions of Section 9, 10,
and 11 until the expiration of one year from the termination of his consulting
relationship with Tekgraf, without regard to the reasons for Aginsky's
resignation from Tekgraf.
16. NON-DISCLOSURES. Each of Aginsky, Tekgraf and the Releasees will not,
except as may be mandated by statutory or regulatory requirements or as may be
required by legal process, disclose to others the terms of this Agreement, the
amounts referred to herein, or the fact of the payment of said amounts, except
that they may disclose to their respective attorneys, accountants or other
professional advisors to whom the disclosure is necessary to effectuate the
purposes for which they have consulted with such professional advisors or after
any disclosure by any other party of the terms hereof or if the terms hereof
cease to be confidential other than as a result of the actions of the party to
be released from his or its obligations under this Section. Each party
understands that this covenant of non-disclosure is a material inducement to
the other parties for the making of this Agreement and that, for the breach
thereof will be entitled to pursue its legal and equitable remedies, including,
without limitation, the right to seek injunctive relief.
17. NON-DISPARAGEMENT.
(a) Aginsky will not disparage Tekgraf or its owners, officers,
directors, employees, agents, or its business, products,
policies, practices or services, in any way whatsoever.
Further, Aginsky will not encourage or make any
representations, engage in any conduct, or take any action
which could be reasonably calculated to materially cause or
materially influence, any person or entity (including, but
not limited to, any present or prospective client, supplier
or employee of Tekgraf) to discontinue, or not enter into, a
contract or business relationship with Tekgraf.
(b) Tekgraf covenants and agrees, and agrees to exert its
reasonable efforts (including disciplinary action comparable
to the disciplinary action the Company would undertake in the
instance of unauthorized disclosure of confidential
information) to cause each of its then current employees to
refrain from intentionally disparaging Mr. Aginsky or his
services to Tekgraf or its subsidiaries or affiliates.
Further, neither Tekgraf or any subsidiary will encourage or
make any representations, engage in any conduct, or take any
action which could be reasonably calculated to materially
cause or materially influence, any person or entity to
discontinue, or not enter into, a business relationship with
Mr. Aginsky or any entity known to be controlled by Mr.
Aginsky.
12. NO ADMISSION. Nothing contained in this Agreement shall constitute or
be treated as an admission by Tekgraf or Aginsky of liability, of any
wrongdoing, or of any violation of law.
13. SEVERABILITY. If any provision of this Agreement is found to be
unenforceable, it shall not affect the enforceability of the remaining
provisions and the court shall enforce all remaining provisions to the extent
permitted by law.
<PAGE> 7
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
14. SUPERCEDES OTHER AGREEMENTS. Except as expressly provided herein in
paragraph 16, this Agreement shall supersede and render null and void any and
all prior agreements between the parties.
15. SUCCESSORS. This Agreement shall bind and benefit Aginsky's heirs,
executors, administrators, successors, assigns, and each of them; it shall also
bind and benefit Tekgraf and its successors and assigns.
16. LAWS. This Agreement shall be deemed to have been entered into in the
state of Georgia and shall be construed and interpreted in accordance with the
laws of that state.
17. NOTICE. The following addresses shall be deemed the proper addresses for
any notices, communications and payments made pursuant to this Agreement:
AGINSKY: Mr. Phillip C. Aginsky
220 North Chambord Drive
Atlanta, Georgia 30327
COPY TO MR. SCHNEIDER: John R. Schneider, Esq.
Smith, Gambrell & Russell, L.L.P.
Suite 3100
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309-3592
TEKGRAF: Chief Executive Officer
Tekgraf, Inc.
6000 Lake Forrest Drive
Suite 110
Atlanta, Georgia 30328
COPY TO MR. STRIBLING: Wade H. Stribling, Esq.
Nelson Mullins Riley & Scarborough, L.L.P.
First Union Plaza, Suite 1400
999 Peachtree Street, N.E.
Atlanta, Georgia 30309
The parties agree that "written notice" shall mean notice provided by
certified mail, return receipt requested, or by Federal Express, signature
required, to the Chief Executive Officer at the address shown above. Notice
will be effective upon the date of receipt by Tekgraf. In addition, Aginsky
shall send a copy of the notice to Wade H. Stribling, Esq., at the address
listed above, at the same time and by the same method of delivery as to
Tekgraf. However, the copy to Mr. Stribling shall not constitute notice to
Tekgraf.
[the remainder of this page has been left blank intentionally]
<PAGE> 8
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
The parties have read and understand the foregoing Agreement, after a
review of all data pertinent and participating with the respective counsel of
their choosing in the drafting of this Agreement. Each party acknowledges that
the decision to execute this Agreement is not predicated on or influenced by
any declarations, representation, warranties or agreements other than those
expressly set forth herein. Each party further acknowledges that the contents
of this Agreement have been explained to him or it by his or its respective
counsel and that this Agreement is entered into freely and voluntarily
following the advice of such counsel. It is further acknowledged that all terms
of this agreement are contractual in nature and not merely recitals and each
party shall be bound hereby.
This Agreement may be executed in as many counterparts as may be
necessary or convenient and by the different parties hereto on different
counterparts, each of which once so executed shall be deemed an original.
This Agreement may not be changed or amended in any respect except by
a writing executed by Mr. Aginsky and the Company (except with respect to
matters other than in connection to Section 6, which may amended by only upon
the execution of all parties hereto).
Dated: October 21 , 1998 /s/ Phillip C. Aginsky
---------------- -----------------------------------
Phillip C. Aginsky
TEKGRAF, INC.
By: /s/ W. Jeffrey Camp
------------------------------
W. Jeffrey Camp
Chief Financial Officer
Attest
By: /s/ Tom Woolsey
------------------------------------
Its: Chief Information Officer
------------------------------------
Agreement to Paragraph 6:
/s/ William Rychel
- ------------------------------
William Rychel
/s/ Albert Sisto
- ------------------------------
Albert Sisto
/s/ Frank X. Dalton
- ------------------------------
Frank X. Dalton
Dated: October 23 , 1998
---------------
<PAGE> 9
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
EXHIBIT A
POSITIONS WITH THE SUBSIDIARIES
OF TEKGRAF, INC.
HELD BY PHILLIP C. AGINSKY
<TABLE>
<S> <C>
1) Chairman of the Tekgraf, Inc., a Georgia corporation ("Tekgraf");
2) Chief Executive Officer of Tekgraf;
3) Director of Tekgraf;
4) Member of the Audit Committee of the Board of Directors of Tekgraf;
5) Member of the Compensation Committee of the Board of Directors of Tekgraf;
6) Director of Microsouth, Inc.;
7) President of Microsouth, Inc.;
8) Director of Tekgraf, inc.;
9) President of Tekgraf, inc.;
10) Director of Computer Graphics Distributing Company;
11) President of Computer Graphics Distributing Company;
12) Director of G&R Marketing, Inc.;
13) President of G&R Marketing, Inc.;
14) Director of Intelligent Products Marketing, Incorporated (which may now be known
as Tekgraf Northwest, Inc.);
15) President of Intelligent Products Marketing, Incorporated (which may now be
known as Tekgraf Northwest, Inc.);
16) Director of IG Distributing, Inc.;
17) President of IG Distributing, Inc.;
18) Director of Computer Graphics Technology, Inc.;
19) President of Computer Graphics Technology, Inc.;
20) Director of Media Graphics Distribution, Inc.;
21) President of Media Graphics Distribution, Inc.;
22) Director of New England Computer Graphics, Inc.;
23) President of New England Computer Graphics, Inc.;
24) Director of Prisym Technologies, Inc.;
25) Officer of Prisym Technologies, Inc.;
26) Director of Crescent, Inc.;
27) Officer of Crescent, Inc.; and
28) Any positions held with any other subsidiary of Tekgraf.
</TABLE>
<PAGE> 10
CONFIDENTIAL TREATMENT REQUESTED BY TEKGRAF, INC.
EXHIBIT B
PRESS RELEASE
Atlanta, GA
October ________, 1998
Phillip Aginsky, 46, who has been Tekgraf's Chairman and CEO since its
incorporation last June, resigned October ____, 1998, to pursue other
interests, but will continue as a consultant to the Tekgraf Board. The Board of
Directors has appointed William M. Rychel, President of the Graphics Division
of Tekgraf as interim CEO. Tekgraf plans to immediately begin a search for a
new President and Chief Executive Officer.
"We appreciate Phillip's counsel and assistance in guiding the company through
its initial merger phase and subsequent IPO. With the initial phase of
Tekgraf's development behind us, it's time to move the company to the next
level of development", said William Rychel.
Tekgraf, Inc., headquartered in Atlanta, Ga., is a value-added wholesale
distributor of advanced computer graphics products and a manufacturer of custom
personal computers. The Tekgraf Graphics Division provides sales, marketing and
technical support of computer graphics technologies through reseller channels.
Demonstration and distribution centers are located throughout the United States
and Canada. The Tekgraf Technology Division is engaged in the manufacture,
sale, distribution and support of special purpose Intel-based NT workstations
and servers. Additional information on Tekgraf may be obtained by visiting the
company Web site at http://www.tekgraf.com, or by calling the nearest Tekgraf
Graphics Division office toll free at 8888-321-TKGF.
Optional:
This press release contains statements that constitute forward-looking
statements within the meaning of the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended. These statements appear
in a number of places in this press release and include all statements that are
not historical statement of fact. The words "may," "would," "could," "will,"
"progress toward," "move forward," "actively pursuing," "increase," "expect,"
"estimate," "anticipate," "believes," "intends," "plans," and similar
expressions and variations thereof are intended to identify forward-looking
statements. Investors are cautioned that such statements are not guarantees of
future performance and involve various risks and uncertainties, many of which
are beyond the Company's control. Actual results may differ materially from
those discussed in the forward-looking statements as a result of factors
described below. These risks include, but are not limited to, competitive
market pressures, material changes in customer demand, availability of labor,
the Company's ability to perform contracts, governmental policies adverse to
the computer industry, economic and competitive conditions, and other risks
outside the control of the Company, as well as those factors discussed in
detail in the Company's filings with the Securities and Exchange Commission,
including the "Risk Factors" section of the Company's registration statement on
Form S-1 (Registration No. 333-33449).
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
Atlanta, GA
October 26, 1998
Phillip Aginsky, 46, who has been Tekgraf's Chairman and CEO since its
incorporation last June, resigned October 23, 1998, to pursue other interests,
but will continue as a consultant to the Tekgraf Board. The Board of Directors
has appointed William M. Rychel, President of the Graphics Division of Tekgraf
as interim CEO. Tekgraf plans to immediately begin a search for a new President
and Chief Executive Officer.
"We appreciate Phillip's counsel and assistance in guiding the company through
its initial merger phase and subsequent IPO. With the initial phase of
Tekgraf's development behind us, it's time to move the company to the next
level of development", said William Rychel.
Tekgraf, Inc., headquartered in Atlanta, Ga., is a value-added wholesale
distributor of advanced computer graphics products and a manufacturer of custom
personal computers. The Tekgraf Graphics Division provides sales, marketing and
technical support of computer graphics technologies through reseller channels.
Demonstration and distribution centers are located throughout the United States
and Canada. The Tekgraf Technology Division is engaged in the manufacture,
sale, distribution and support of special purpose Intel-based NT workstations
and servers. Additional information on Tekgraf may be obtained by visiting the
company Web site at http://www.tekgraf.com, or by calling the nearest Tekgraf
Graphics Division office toll free at 8888-321-TKGF.
This press release contains statements that constitute forward-looking
statements within the meaning of the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended. These statements appear
in a number of places in this press release and include all statements that are
not historical statement of fact. The words "may," "would," "could," "will,"
"progress toward," "move forward," "actively pursuing," "increase," "expect,"
"estimate," "anticipate," "believes," "intends," "plans," and similar
expressions and variations thereof are intended to identify forward-looking
statements. Investors are cautioned that such statements are not guarantees of
future performance and involve various risks and uncertainties, many of which
are beyond the Company's control. Actual results may differ materially from
those discussed in the forward-looking statements as a result of factors
described below. These risks include, but are not limited to, competitive
market pressures, material changes in customer demand, availability of labor,
the Company's ability to perform contracts, governmental policies adverse to
the computer industry, economic and competitive conditions, and other risks
outside the control of the Company, as well as those factors discussed in
detail in the Company's filings with the Securities and Exchange Commission,
including the "Risk Factors" section of the Company's registration statement on
Form S-1 (Registration No. 333-33449).
