THIS DOCUMENT IS A COPY OF THE FORM 10-Q FILED ON
JULY 16, 1997 PURSUANT TO A RULE 201 TEMPORARY
HARDSHIP EXEMPTION.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-21192
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
(Exact Name of Registrant as Specified in its Charter)
LOUISIANA 72-0721367
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
109 NORTH PARK BLVD., COVINGTON, LOUISIANA 70433
(Address of Principal Executive Offices) (Zip Code)
(504) 867-5000
Registrant's Telephone Number, Including Area Code
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
At April 9, 1997, there were 5,566,906 shares of common stock, $.10 par value,
outstanding.
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
Statements of Operations -
Three and Nine Months
Ended May 31, 1997 and May 31,1996 3
Balance Sheets -
May 31, 1997, August 31, 1996
and May 31, 1996 4
Statements of Cash Flows -
Nine Months Ended May 31, 1997
and May 31, 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition
and Results of Operations 8
Part II. Other Information
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED MAY 31, 1997 AND MAY 31, 1996
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
1997 1996 1997 1996
Net sales $51,029,642 $60,188,532 $195,086,958 $229,009,134
Cost of sales (Note 3) 42,822,898 47,269,251 162,327,502 179,914,389
Gross profit 8,206,744 12,919,281 32,759,456 49,094,745
Selling, general and 14,213,776 14,745,996 50,328,703 49,025,291
administrative expenses
(Note 3)
Reorganization items 543,591 _ 543,591 _
Operating income
(loss) (6,550,623) (1,826,715) (18,112,838) 69,454
Other income (expense):
Interest expense (810,799) (583,674) (1,771,606) (1,562,030)
Interest income 13,074 12,021 77,856 86,036
Other income
(expense), net (1,154,148) 117,280 (1,202,919) 337,086
(1,951,873) (454,373) (2,896,669) (1,138,908)
Loss before income taxes (8,502,496) (2,281,088) (21,009,507) (1,069,454)
Income tax expense
(benefit) (Note 4) _ (879,000) 2,690,000 (406,000)
Net loss ($8,502,496)($1,402,088) ($23,699,507) ($663,454)
Per share data:
Net income (loss)
per share ($1.53) ($0.25) ($4.26) ($0.12)
Weighted average number of
common shares outstanding 5,566,906 5,566,906 5,566,906 5,566,906
The accompanying notes are an integral part of these financial statements.
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
BALANCE SHEETS (UNAUDITED)
May 31, August 31, May 31,
1997 1996 1996
ASSETS
Current assets:
Cash and cash
equivalents $1,964,595 $3,303,822 $2,485,028
Investments in
marketable securities 505,161 129,788 215,570
Receivables (net of
an allowance of $4.2
million at May 31, 1997
and $2.9 million at
August 31,1996 and
$806,000 at May 31,
1996) 10,517,161 14,561,102 17,527,247
Merchandise inventory 46,376,942 56,387,842 61,449,046
Deferred income taxes ----- 3,033,000 1,657,377
Other 1,226,338 471,399 720,695
Total current assets 60,590,197 77,886,953 84,054,963
Property and equipment,
net 30,410,500 36,376,959 37,143,490
Deferred income taxes ----- 1,234,000 2,246,169
Intangibles and other 2,385,632 3,535,639 3,600,747
$93,386,329 $119,033,551 $127,045,369
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Liabilities not subject to compromise:
Current portion of
long-term debt $ 124,343 $ 2,478,179 $ 2,450,517
Accounts payable 37,443,979 47,793,786 52,550,713
Accrued expenses 8,336,490 7,169,218 8,052,488
Deferred revenue 3,169,594 4,621,294 5,101,197
49,074,406 62,062,477 68,154,915
Liabilities subject to
compromise:
Current portion of
long-term debt 711,927 - -
Accounts payable 4,105,363 _ _
Accrued expenses 4,765,461 - -
9,582,751 - -
Total current
liabilities 58,657,157 62,062,477 68,154,915
Long-term debt
not subject to
compromise,
less current portion 18,314,145 18,191,371 18,412,684
Deferred revenue 2,443,165 4,650,296 5,612,759
20,757,310 22,841,667 24,025,443
Long-term debt
subject to compromise,
less current portion 3,352,524 - -
Total liabilities 82,766,991 84,904,144 92,180,358
Commitments and
contingencies - - -
Shareholders' equity:
Preferred stock,
500,000 shares
authorized, no shares
issued or outstanding ______ ______ ______
Common stock, $.10 par
value; 20,000,000 shares
authorized, 5,566,906
issued and outstanding
at May 31, 1997,
August 31, 1996
and May 31, 1996 556,691 556,691 556,691
Paid-in capital 32,373,306 32,373,306 32,373,306
Retained earnings
(deficit) (22,310,659) 1,388,849 2,113,456
Less:
Unearned compensation ----- ----- (42,188)
Unrealized loss on
marketable securities
available for sale ----- (189,439) (136,254)
Total shareholders'
equity 10,619,338 34,129,407 34,865,011
$93,386,329 $119,033,551 $127,045,369
The accompanying notes are an integral part of these financial statements.
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
May 31, May 31,
1997 1996
Cash flow from operating activities:
Net loss $ (23,699,507) $ (663,454)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 4,142,822 4,309,845
Provision for uncollectible
receivables 3,049,240 1,523,024
Deferred income taxes (4,633,000) 3,717,654
Valuation allowance for deferred tax
assets 8,900,000 _
Store closure reserve 6,776,247 -
Loss on disposal of investments 305,504 -
Loss on disposal of assets 1,831,364 -
Stock awards - 25,313
(Increase) decrease in assets:
Receivables 994,701 353,405
Merchandise inventory 10,010,902 (1,190,640)
Other current assets (1,050,604) 16,458
Increase (decrease) in liabilities:
Accounts payable (6,244,445) (1,753,055)
Accrued expenses 1,983,192 832,983
Deferred revenue (3,658,831) (5,251,308)
Net cash (used in) provided by
operating activities (1,292,415) 1,920,225
Cash flow investing activities:
Purchase of property and equipment (1,686,512) (630,084)
Purchase of investments (500,000) -
Other 57,517 (57,008)
Net cash used in investing activities (2,128,995) (687,092)
Cash flow from financing activities:
Decrease in long-term debt (1,579,470) (1,746,551)
Decrease in capital lease obligation - (106,873)
Borrowings under line of credit 31,850,000 -
Repayments under line of credit (28,188,347) -
Net cash provided by (used in)
financing activities 2,082,183 (1,853,424)
Net decrease in cash and cash equivalents (1,339,227) (620,291)
Cash and cash equivalents at beginning of
period 3,303,822 3,105,319
Cash and cash equivalents at end of
period 1,964,595 2,485,028
Cash paid during the period for:
Interest expense 1,875,788 1,463,593
Income taxes 26,000 118,240
Supplemental schedule of non-cash
investing and financing activities:
Assets acquired under capital lease $ 285,701 $ -
The accompanying notes are an integral part of these financial statements.
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Basis of Presentation
The information for the three and nine months ended May 31, 1997 and May
31, 1996 is unaudited, but in the opinion of management, reflects all
adjustments, which are of a normal recurring nature, necessary for a fair
presentation of financial position and results of operations for the interim
periods. The accompanying financial statements should be read in conjunction
with the financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the fiscal year ended August 31, 1996.
The financial statements have been prepared in accordance with the
American Institute of Certified Public Accountants Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code."
The financial statements have been prepared using accounting principles
applicable to a going concern, which assumes realization of assets and
settlement of liabilities in the normal course of business. The
appropriateness of using the going concern basis is dependent upon, among
other things, the ability to comply with debtor in possession financing
agreements, confirmation of a plan of reorganization, the ability to achieve
profitable operations, and the ability to generate sufficient cash flows from
operations to meet its obligations.
The results of operations for the three and nine months ended May 31,
1997 are not necessarily indicative of the results to be expected for the full
fiscal year ending August 31, 1997.
(2) Current portion of long-term debt and short-term borrowings under line
of credit
The Company's term loan and line of credit facility with the banks was
amended in June 1997 to defer principal payments for one year until June 1998,
to defer maturity of the facility for three years until August 31, 2000, and
to remove the Company's merchandise inventory as collateral for the facility.
The principal balance under the term note and the line of credit were combined
into a single note with an aggregate principal balance of $17.9 million,
bearing interest at 9% per annum. Until June 1998, interest only is payable
monthly. Thereafter, principal payments are due quarterly, with the first
payment due on September 1, 1998, and interest is due monthly. The amount of
the principal payments is based on a 20 year amortization with a balloon
payment due on August 31, 2000. The note is secured by the Company's real
estate.
Additionally, the Company has obtained a $3 million debtor in possession
line of credit from two of its floor plan lenders. The line of credit matures
in December 1998 and bears interest at prime plus 3% payable monthly, with two
principal payments of $1.5 million each due December 1997 and December 1998.
This line of credit, together with amounts owed under such lenders' floor plan
financing arrangements, is collateralized by inventory and the Company's
anticipated tax refund, as well as by a broad lien on all of the Company's
other assets.
(3) Chapter 11 Bankruptcy Proceedings
On June 4, 1997, the Company voluntarily filed for protection under
Chapter 11 of the U.S. Bankruptcy Code. As part of its reorganization plan,
the Company will close by the end of July 1997 nine of its stores as well as
one distribution center. The facilities that will be closed are (i) one store
each in Tuscaloosa, Alabama; Longview, Texas; Texarkana, Texas; Jackson,
Mississippi; Chattanooga, Tennessee; Alexandria, Louisiana; and Lafayette,
Louisiana, (ii) two stores in Memphis, Tennessee and (iii) the Bessemer,
Alabama warehouse.
In connection with these closures, the Company has recorded non-
recurring charges of (i) $2.0 million expected to be incurred in connection
with the liquidation of inventory below cost and (ii) $1.3 million associated
with the write-off of leasehold improvements at these locations. In addition,
the goodwill associated with the Company's July 1993 acquisition of Shreveport
Refrigeration, Inc. was reduced by $640,000 due to the closure of two
locations that were part of that acquisition.
The Company has obtained the approval of the bankruptcy court to
continue to pay for utility services, certain consumer practices (including
the continuation of service on existing extended warranty contracts), payroll
and employee benefits, and property and liability insurance coverage. These
items are recorded as accrued expenses not subject to compromise.
The Company has secured liabilities, not subject to compromise, owed to
its floor plan lenders and its bank group. The liabilities owed to the floor
plan lenders are secured by the Company's merchandise inventory. The amount
due on the bank note is secured by the Company's real estate holdings.
Unsecured claims are included in the amounts listed as liabilities
subject to compromise.
The Company's projections indicate that, during the fourth quarter of
fiscal 1997, it will have sufficient working capital to maintain its
operations at its current reduced levels. However, inasmuch as the Company's
first fiscal quarter has historically been the quarter during which the
Company builds its inventory levels in advance of the Christmas selling
season, the Company expects that it will require additional cash to fund such
inventory purchases. Efforts are currently underway to arrange for the
provision of the necessary funds through advances from the Company's inventory
vendor community, although no assurance can be given that such efforts will be
successful.
The measures taken by the Company in the third fiscal quarter and June
of 1997 have largely resolved the Company's short-term liquidity problem
discussed in its last Form 10-Q by extending the maturity of its bank credit
facility and obtaining a new line of credit from its floor plan lenders.
However, the Company's cash position continues to be strained and, as
discussed above, the Company will require additional sources of working
capital in order to finance its operations during peak periods. Moreover,
even at its current reduced levels, it would be difficult for the Company to
continue to conduct its operations on an ongoing basis unless it improves its
operating performance and profitability. As discussed above, efforts are
underway to locate sources of additional working capital to fund the Company's
peak inventory purchase requirements. In addition, the Company has recently
hired a new chief executive officer with extensive retail experience who plans
to continue implementing certain previously described initiatives as well as
new ways in which the Campo chain and its products can be differentiated from
its competitors in an effort to increase sales, improve the efficiency of its
operations and increase profit margins.
(4) Income taxes
The Company recorded a valuation allowance in the amount of $7.4 million
in the second quarter and an additional $1.5 million in the third quarter for
that portion of the net deferred tax asset that cannot be realized by
carrybacks or offsetting deferred tax liabilities. The valuation allowance is
based upon the fact that sufficient positive evidence does not exist, as
defined in Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, regarding the Company's ability to realize certain deferred tax
assets and carryforward items. As a result of the valuation allowance, income
tax expense was $0 and approximately $2.7 million for the three and nine-month
periods ended May 31, 1997.
(5) Subsequent events
On June 30, 1997, Rex O. Corley, Jr. resigned as President, Chief
Operating Officer and Acting Chairman and Chief Executive Officer, and as a
member of the Board of Directors, of the Company.
William E. Wulfers was named President and Chief Executive Officer and a
member of the Board of Directors. Since 1990, Wulfers has served as the
Regional Vice President of Wal-Mart's operations in Louisiana, Arkansas,
Mississippi, Virginia, North Carolina, South Carolina, Georgia and Florida.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
As previously disclosed, the poor performance of the retail industry and
the Company over an extended period led management during fiscal 1996 to
review the Company's operations and to explore methods to improve operational
efficiency and reduce costs. To that end, the Company implemented several
initiatives designed to improve the Company's operations. Although management
believes that these measures, if given enough time, would have a positive
impact, the Company's comparable store sales continued to decline as retail
industry conditions have continued to deteriorate, leading management to
conclude during the first quarter of fiscal 1997 that a comprehensive review
of the Company's operations was appropriate for the purpose of developing a
long-term strategic plan. As part of this self-evaluative process, the
Company hired a consulting firm in the third quarter that specializes in
turning around financially troubled companies in consumer retail industries.
After evaluating and discussing with the Board of Directors several different
strategic options, the consulting firm ultimately recommended to the Board a
significant downsizing of the Company's operations; specifically, the closing
of nine stores, in addition to two unprofitable stores that had been closed in
the second quarter, and the closure of one distribution center. In addition,
in order to allow the Company to fully realize the operational benefits from
the closing of these facilities, the consulting firm recommended that the
Company seek the protection of the federal bankruptcy laws, which the Company
did by filing a voluntary petition under Chapter 11 on June 4, 1997. The
Company's use of this strategic tool was primarily to allow the Company to
terminate on a more favorable basis the long-term leases of the facilities
identified for closure. The Chapter 11 filing was undertaken with the full
cooperation and support of the Company's bank group and floor plan lenders.
The Company is proceeding with "Going Out of Business" sales at all of
the nine stores identified for closure in order to allow for the expeditious
and orderly liquidation of the inventory at the highest recovery, and
management expects that the store and warehouse closings will be complete by
the end of July 1997. In connection with these closures, the Company has
recorded non-recurring charges of (i) $2.0 million expected to be incurred in
connection with the liquidation of inventory below cost, which is recorded in
cost of goods sold, and (ii) $1.3 million associated with the write-off of
leasehold improvements at these locations, which is recorded in other income.
In addition, the goodwill associated with the Company's July 1993 acquisition
of Shreveport Refrigeration, Inc. was reduced by $640,000 due to the closure
of two locations that were part of that acquisition, and this charge is
recorded in selling, general and administrative expenses.
As discussed in "Liquidity and Capital Resources," the Company has
amended its bank credit facility to defer principal payments for one year
until June 1998, to defer maturity of the facility for three years until
August 31, 2000, and to remove the Company's merchandise inventory as
collateral for the facility. The Company has also obtained a $3 million line
of credit from certain of its floor plan lenders. The Company's projections
indicate that, during the fourth quarter of fiscal 1997, it will have
sufficient working capital to maintain its operations at its current reduced
levels. However, inasmuch as the Company's first fiscal quarter has
historically been the quarter during which the Company builds its inventory
levels in anticipation of the Christmas selling season, the Company expects
that it will require additional cash to fund such inventory purchases.
Efforts are currently underway to arrange for the provision of the necessary
funds through advances from the Company's inventory vendor community, although
no assurance can be given that such efforts will be successful. See
"Liquidity and Capital Resources."
Immediately following its filing for protection under Chapter 11, the
Company experienced temporary inventory shortages largely attributable to the
disruptive effect that the bankruptcy filing had on its relationships with its
vendors. These inventory shortages had an adverse effect on sales and
customer confidence during the first two months of the fourth quarter. The
Company believes it has successfully restored its relationships with its
vendors and expects that inventory levels will be rebuilt in sufficient
quantities to meet customer demand by early August. In order to restore
customer confidence and stimulate sales, the Company also plans to introduce a
special advertising campaign in August. However, the results of operations
for the fourth quarter will likely be significantly and adversely affected by
this disruption as well as by the "Going out of Business" sales at its nine
closing stores.
Results of Operations
The following table sets forth, for the periods indicated, the relative
percentages that certain income and expense items bear to net sales:
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
1997 1996 1997 1996
Net sales 100.00% 100.00% 100.00% 100.00%
Cost of sales 83.92 78.54 83.21 78.56
Gross profit 16.08 21.46 16.79 21.44
Selling, general and 28.92 24.50 26.08 21.41
administrative expense
Operating income (loss) (12.84) (3.04) (9.29) 0.03
Interest expense (1.59) (0.97) (0.91) (0.68)
Interest income 0.03 0.02 0.04 0.04
Other income, net (2.26) 0.19 (0.62) 0.15
(3.82) (0.76) (1.49) (0.49)
Income (loss) before income (16.66) (3.80) (10.78) (0.46)
taxes
Income tax expense (benefit) 0 (1.46) 1.38 (0.18)
Net income (loss) (16.66)% (2.34)% (12.16)% (0.28)%
Three Months Ended May 31, 1997 as Compared to Three Months Ended May 31, 1996
Net sales for the three months ended May 31, 1997 decreased 15.2% to
$51.0 million compared to $60.2 million for the same period in 1996.
Comparable retail store sales for the three months ended May 31, 1997
decreased by 11.2%. The decline in sales reflects the combined impact of the
general weakness in the retail consumer electronics industry, increased
competition in many of the Company's principal markets, a slowdown in the
development of new products in consumer electronic categories and reduced
spending levels by consumers for non-essential goods believed to be due to
record high consumer debt levels.
Extended warranty revenue recognized under the straight-line method
(applicable to those extended warranty contracts sold prior to August 1, 1995)
was $1.4 million and $2.0 million for the quarters ended May 31, 1997 and May
31, 1996, respectively. Extended warranty expenses for these same periods
were $893,000 and $1.3 million, respectively, before any allocation of other
selling, general and administrative expenses. Since August 1, 1995, all
extended warranty service contracts have been sold by the Company to an
unaffiliated third party. The Company records the sale of these contracts,
net of any related sales commissions and the fees paid to the third party, as
a component of net sales and immediately recognizes revenue upon the sale of
such contracts. Although the Company sells these contracts at a discount, the
amount of the discount approximates the cost the Company would incur to
service these contracts, while transferring the full obligation for future
services to a third party. Net revenue from extended warranty contracts sold
to the third party for the quarters ended May 31, 1997 and May 31, 1996 was
$1.4 million and $1.6 million, respectively. The decline in net revenue from
the sale of extended warranties is a direct result of the reduced level of
retail store sales.
Gross profit for the three months ended May 31, 1997 was $8.2 million or
16.1% of net sales as compared to $12.9 million, or 21.5% of net sales for the
comparable period in the prior year. Excluding the charges described above in
"Overview," gross profit for the three months ended May 31, 1997 would have
been $10.7 million or 21.0% of net sales. The gross profit percentage
decrease was primarily driven by a combination of soft demand affecting the
retail industry generally, increased competition (both in number of
competitors and corresponding increased price competition) and decreased
vendor rebates due to the Company's lower volume of purchases. The Company
also experienced an increase in promotional costs as a percent of sales due to
increased use of discounting, no interest financing and other promotional
efforts to maintain sales volumes in the challenging environment described
above.
Selling, general and administrative expenses were $14.8 million or 28.9%
of net sales for the three months ended May 31, 1997 as compared to $14.7
million, or 24.5% of net sales for the comparable period in the prior year.
Excluding the charges described above in "Overview," selling, general and
administrative expenses would have been $14.1 million or 27.7% of net sales.
This percentage increase was primarily due to decreased vendor funding to
offset advertising expenses. The Company also experienced a decrease as a
percentage of sales in promotional and other fees derived from the Company's
private label credit card program.
The Company's effective income tax rate was 0% and (38.5%) for the three
months ended May 31, 1997 and May 31, 1996, respectively. No income tax
benefits were recorded in the third quarter based on the fact that sufficient
positive evidence does not exist, as defined in Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, regarding the
Company's ability to realize such benefits.
Nine Months Ended May 31, 1997 as Compared to Nine Months Ended May 31, 1996
Net sales for the nine months ended May 31, 1997 decreased 14.8% to
$195.1 million compared to $229.0 million for the same period in 1996.
Comparable retail store sales for the nine months ended May 31, 1997 decreased
by 12.8%. The decline in sales reflects the combined impact of the general
weakness in the retail consumer electronics industry, increased competition in
many of the Company's principal markets, a slowdown in the development of new
products in consumer electronic categories and reduced spending levels by
consumers for non-essential goods believed to be due to record high consumer
debt levels.
Extended warranty revenue recognized under the straight-line method
(applicable to those extended warranty contracts sold prior to August 1, 1995)
was $4.6 million and $6.6 million for the nine months ended May 31, 1997 and
May 31, 1996, respectively. Extended warranty expenses for these same periods
were $2.9 million and $4.1 million, respectively, before any allocation of
other selling, general and administrative expenses. Net revenue from extended
warranty contracts sold to the third party for the nine months ended May 31,
1997 and May 31, 1996 was $5.3 million and $6.6 million, respectively. The
decline in net revenues from the sale of extended warranties is a direct
result of the reduced level of retail store sales.
Gross profit for the nine months ended May 31, 1997 was $32.8 million or
16.8% of net sales as compared to $49.1 million, or 21.4% of net sales for the
comparable period in the prior year. Excluding the charges described above in
"Overview," and charges totaling $16.7 million taken in the second quarter,
gross profit for the nine months ended May 31, 1997 would have been $37.4
million or 20.8% of net sales. The gross profit percentage decrease was
primarily driven by a combination of soft demand affecting the retail industry
generally, increased competition (both in number of competitors and
corresponding increased price competition) and decreased vendor rebates due to
the Company's lower volume of purchases.
Selling, general and administrative expenses were $50.9 million or 26.1%
of net sales for the nine months ended May 31, 1997 as compared to $49.0
million, or 21.4% of net sales for the comparable period in the prior year.
Excluding the charges described above in "Overview," and charges totalling
$16.7 million taken in the second quarter, selling, general and administrative
expenses would have been $43.3 million or 21.0% of net sales.
The Company's effective income tax rate was 12.8% and (38.0%) for the
nine months ended May 31, 1997 and May 31, 1996, respectively. The effective
income tax rate for the nine months ended May 31, 1997 results from a
valuation allowance of $7.4 million that was recorded during the second
quarter and a valuation allowance of $1.5 million that was recorded during the
third quarter.
Liquidity and Capital Resources
Net cash used in operating activities was $1.3 million and ($1.9) million
for the nine months ended May 31, 1997 and May 31, 1996 respectively, while
net cash provided by financing activities for the same comparable periods was
$2.1 million and ($1.9) million, respectively. The excess cash from financing
activities in the current period, which was previously provided by short term
borrowing arrangements, was used by the Company for an investment in a new
primary business system. The shortfall in cash from operations reflects
the reduced level of sales by the Company.
The Company incurred capital expenditures of $1.7 million and $630,000
during the nine months ended May 31, 1997 and May 31, 1996, respectively,
primarily in connection with new computer equipment purchases and leasehold
improvements funded with short-term borrowings.
As of May 31, 1997, the Company used several "floor plan" finance
companies to finance the majority of its merchandise purchases. The Company
has negotiated an aggregate borrowing limit with these finance companies of
approximately $45 million and it collateralizes the outstanding borrowings
with merchandise inventory and certain receivables. The new arrangements with
its floor plan lenders are "pay-as-sold" lending facilities, with the Company
being required to pay down indebtedness on a daily basis as the financed goods
are sold. In addition, the Company finances certain inventory purchases
through open-account arrangements with various vendors.
The Company has also obtained debtor in possession financing from two of
its floor plan lenders in the form of a $3 million line of credit. The line
of credit matures in December 1998 and bears interest at prime plus 3%,
payable monthly, with two principal payments of $1.5 million each due December
1997 and December 1998. The primary use of the line of credit is to fund the
Company's "going out of business" sales for its closing stores and to finance
inventory purchases during peak periods. This line of credit, together with
amounts owed under such lenders' floor plan financing arrangements, is
collateralized by merchandise inventory and the Company's anticipated tax
refund, as well as by a broad lien on all of the Company's other assets.
The Company's bank term loan and line of credit was amended in June 1997
to defer principal payments for one year until June 1998, to defer maturity of
the facility for three years until August 31, 2000, and to remove the
Company's merchandise inventory as collateral for the facility. The principal
balance under the term note and the line of credit were combined into a single
note with an aggregate principal balance of $17.9 million, bearing interest at
9% per annum. Until June 1998, interest only is payable monthly. Thereafter,
principal payments are due quarterly, with the first payment due September 1,
1998, and interest is due monthly. The amount of the principal payments is
based on a 20 year amortization with a balloon payment due on August 31, 2000.
The note is secured by the Company's real estate.
The Company has experienced declining comparable store sales since the
third quarter of fiscal 1995 resulting in the Company's reporting of a net
loss of $1.4 million for fiscal 1996 and a net loss of $23.7 million for the
first nine months of fiscal 1997 (after the second quarter charges of $16.7
million and the third quarter charges discussed in "Overview" totaling $4.4
million). In addition, for the nine months ended May 31, 1997, net cash used
in operating activities by the Company was approximately $1.3 million, leaving
the Company with a cash balance of approximately $2.0 million as of May 31,
1997.
The Company's projections indicate that, during the fourth quarter of
fiscal 1997, it will have sufficient working capital to maintain its
operations at its current reduced levels. However, inasmuch as the Company's
first fiscal quarter has historically been the quarter during which the
Company builds its inventory levels in advance of the Christmas selling
season, the Company expects that it will require additional cash to fund such
inventory purchases. Efforts are currently underway to arrange for the
provision of the necessary funds through advances from the Company's inventory
vendor community, although no assurance can be given that such efforts will be
successful.
The measures taken by the Company in the third fiscal quarter and June
of 1997 have largely resolved the Company's short-term liquidity problem
discussed in its last Form 10-Q by extending the maturity of its bank credit
facility and obtaining a new line of credit from its floor plan lenders.
However, the Company's cash position continues to be strained and, as
discussed above, the Company will require additional sources of working
capital in order to finance its operations during peak periods. Moreover,
even at its current reduced levels, it would be difficult for the Company to
continue to conduct its operations on an ongoing basis unless it improves its
operating performance and profitability. As discussed above, efforts are
underway to locate sources of additional working capital to fund the Company's
peak inventory purchase requirements. In addition, the Company has recently
hired a new chief executive officer with extensive retail experience who plans
to continue implementing certain previously described initiatives as well as
new ways in which the Campo chain and its products can be differentiated from
its competitors in an effort to increase sales, improve the efficiency of its
operations and increase profit margins.
As is customary when a company files for protection under Chapter 11,
the Company has received a letter from the Nasdaq Stock Market requesting
certain information and evidence that the Company continues to meet all Nasdaq
National Market listing requirements. Although the Company has responded to
Nasdaq's request fully, there can be no assurance that Nasdaq will not
commence delisting proceedings against the Company. If the Company's common
stock were to be delisted, the Company's common shareholders would likely
experience a reduction in the liquidity of their shares.
Impact of Inflation
In management's opinion, inflation has not had a material impact on the
Company's financial results for the three and nine months ended May 31, 1997
and May 31, 1996. Technological advances coupled with increased competition
have caused prices on many of the Company's products to decline. Those
products that have increased in price have in most cases done so in proportion
to current inflation rates. Management does not anticipate that inflation
will have a material impact on the Company's financial results in the future.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material developments during the three months ended
May 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Amended and Restated Articles of Incorporation of the Company
(1), as amended by Articles of Amendment dated January 3,
1995(2).
3.2 Composite By-laws of the Company, as of October 4, 1996.(3)
10.1 Severance Agreement and Personal Services Contract and Non-
competition Agreement, dated March 19, 1997, by and between
Campo Electronics, Appliances and Computers, Inc. and Anthony
P. Campo.
10.2 Employment Agreement, dated March 21, 1997, by and between
Campo Electronics, Appliances and Computers, Inc. and Rex O.
Corley, Jr., as terminated by Severance Agreement dated June
19, 1997.
10.3 Employment Agreement, dated March 21, 1997, by and between
Campo Electronics, Appliances and Computers, Inc. and Charles
S. Gibson, Jr., as amended on June 24, 1997.
10.4 Employment Agreement, dated March 21, 1997, by and between
Campo Electronics, Appliances and Computers, Inc. and Wayne J.
Usie, as amended on June 24, 1997.
10.5 Employment Agreement, dated April 14, 1997, by and between
Campo Electronics, Appliances and Computers, Inc. and John K.
Ross.
10.6 Employment Agreement, dated April 23, 1997, by and between
Campo Electronics, Appliances and Computers, Inc. and James B.
Warren.
10.7 Employment Agreement, dated June 15, 1997, by and between Campo
Electronics, Appliances and Computers, Inc. and William E.
Wulfers.
27 Financial Data Schedule
__________
(1) Incorporated by reference from the Company's Registration
Statement on Form S-1 (Registration No. 33-56796) filed with
the Commission on January 6, 1993.
(2) Incorporated by reference from the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended February 28, 1995.
(3) Incorporated by reference from the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended November 30, 1996.
(b) Reports on Form 8-K.
A current report on Form 8-K was filed on June 4, 1997 to report the
Company's filing of a voluntary petition to reorganize under
Chapter 11 of the Federal Bankruptcy Code.
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
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 thereunto duly authorized.
CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
July 14, 1997 /s/ WILLIAM E. WULFERS
William E. Wulfers
President and Chief Executive Officer,
/s/ WAYNE J. USIE
Wayne J. Usie
Chief Financial Officer and Secretary
March 19, 1997
Page 1
EXHIBIT 10.1
March 19, 1997
Anthony P. Campo
104 Chipola Court
Mandeville, LA
Dear Anthony:
This letter is to set forth the terms that have been freely
and mutually agreed upon by us in connection with your separation
from employment with the Company, effective March 19, 1997.
In satisfaction of all of its obligations under your
Employment Agreement dated December 16, 1993, as amended May 16,
1996, and your Change of Control Agreement, the Company will (i)
pay in full to you all salary, wages, and other compensation or
remuneration owed and due to you arising out of or related to
your employment with the Company through March 19, 1997, less
applicable withholding for taxes; (ii) pay to you in a lump sum
of $363,000 less applicable withholding for taxes; (iii) for a
period of 12 months from March 19, 1997, reimburse you for the
health insurance premiums paid by you for health insurance under
your COBRA elections made to continue the coverage that the
Company maintains; (iv) continue the lease payments, insurance,
etc. that the Company has been paying with respect to, and permit
you to continue to use, the Company automobile you are currently
using for the duration of the current lease; and (v) permit you
to retain your office computer and other small items of a
personal nature in your office.
The Company acknowledges that you will remain a director of
the Company until your resignation, removal or non-reelection and
that for purposes of compensation of directors, you will be a
non-employee director.
The Company will also enter into with you a consulting and
non-competition agreement (the "Agreement") in the form attached.
In exchange for the above, you will enter into the Agreement
and you voluntarily release the Company and its affiliates,
officers, agents, directors, employees, shareholders and insurers
from any and all claims of whatsoever nature and kind which may
have arisen from any act done, or not done, relating in any way
to your employment with the Company and its affiliates,
including, but not limited to, the Employment Agreement and any
alleged violation of Title VII of the Civil Rights Act of 1964,
the Age Discrimination Act of 1967, the Employee Retirement
Income Security Act (ERISA), the Fair Labor Standards Act, the
American with Disabilities Act, and any other federal, state, or
local law, regulation or ordinance.
You and the Company both agree that neither party will
display, discuss or publicize this letter agreement, its
underlying terms or the facts and circumstances leading to the
separation of your employment with the Company except as
necessary to comply with applicable laws and legal process. You
understand that disclosure of the terms is required by federal
securities laws.
This letter agreement further supersedes any and all other
agreements, either oral or in writing, between us with respect to
your employment with the Company and contains all the agreements
between us with respect to such employment, except that you will
continue to comply with Paragraph 9 of the Employment Agreement
in accordance with its terms.
The construction and interpretation of this agreement shall
be governed by and construed and enforced in accordance with the
laws of the State of Louisiana.
Very truly yours,
CAMPO ELECTRONICS, APPLIANCES,
AND COMPUTERS, INC.
By: /s/ RON FORMAN
AGREED TO AND ACCEPTED THIS
19th DAY OF MARCH, 1997.
/s/ ANTHONY P. CAMPO
March 19, 1997
Page 1
PERSONAL SERVICES CONTRACT AND NON-COMPETITION AGREEMENT
Agreement between Campo Electronics, Appliances and
Computers, Inc. (the "Company") and Anthony P. Campo
("Consultant") dated March 19, 1997.
1. Definitions. The following terms shall have the
meanings set forth below:
(a) "Associate" and "Affiliate" - the meanings
specified in Rule 12b-2 under the Securities Exchange Act of
1934, as amended ("Rule 12b-2").
(b) "Business" - the business in which the Company is
currently engaged, including but not limited to the retail sale
and installation of (i) major home appliances such as microwave
ovens, washing machines, dryers, air conditioners, dishwashers,
refrigerators, freezers, ranges and vacuum cleaners; (ii)
consumer electronics, such as televisions, video cassette
recorders, camcorders, audio components, audio systems, portable
audio equipment, car stereos, mobile telephones and automobile
anti-theft devices; and (iii) home office products, such as
personal computers, telephones, answering machines, fax machines,
copiers, calculators and computer software.
(c) "Competitive Business" - any business or line of
business that (i) in whole or in part, as of the date of this
Agreement, is the same as, substantially similar to, or
competitive with, any facet of the Business and (ii) operates,
sells, markets, competes or derives revenue in the Restricted
Market.
(d) "Person" - any natural person, any entity, and any
enterprise of any kind, including governmental or political
subdivisions, agencies or instrumentalities thereof
(e) "Restricted Market" - (i) During the term of this
Agreement, the parishes in Louisiana of Orleans, East Baton
Rouge, St. Tammany, Caddo, Bossier, Ouachita, Calcasieu and
Rapides, and all parishes, counties and municipalities within the
other states within which the Company is then engaged in its
Business and (ii) following termination of this Agreement for the
periods of time in subsections 3(c) and 3(d), the above parishes
of Louisiana, any parish of Louisiana in which the Company is
engaged in its Business at the time of such termination, and such
additional jurisdictions, as are specified in writing to
Consultant at such time.
2. Personal Services to be Performed; Term; Compensation.
(a) The Company hereby engages Consultant to serve as its
consultant and Consultant agrees to so serve for a period
commencing as of the date hereof and ending on the second
anniversary of the date hereof, unless sooner terminated as
provided herein. Consultant agrees to perform services on such
matters and at such times as and when requested by the management
or Board of Directors of the Company upon reasonable notice.
Consultant agrees to devote such of his time, skill, labor and
attention to the performance of such services as may be necessary
or desirable to render the prompt and effective performance of
his duties hereunder.
(b) Consultant shall not be precluded by this Section
from pursuing other employment or occupational or vocational
activities, provided that he complies with the covenants in
Sections 2(a) and 3.
(c) In exchange for his services and his covenants in
Section 3, the Company shall pay Consultant $5,000 per month,
payable monthly. Consultant shall also be entitled to
reimbursement for all travel and other out-of-pocket expenses
reasonably incurred by him in the performance of his duties,
subject to Company policies with respect thereto, after receipt
of Consultant's written expense voucher (with copies of bills
attached) indicating the amount, nature and purpose of the
expenses incurred, all of which shall be in such form and detail
as to enable the Company to substantiate its federal income tax
deductions for such expenses.
3. Covenant Not to Compete. (a) Consultant hereby agrees
that, he will not, and will cause his Affiliates and Associates
not to, directly or indirectly:
(i) own, manage, operate, control, consult,
advise, promote, invest or acquire an interest in (other than
investments not exceeding 4% of voting or equity), be employed
by, act as an agent on behalf of, allow his skill, knowledge,
experience or reputation to be used by, or otherwise engage or
participate in (whether as a proprietor, partner, shareholder,
director, officer, employee, consultant, advisor, sales agent,
joint venturer, investor, promoter or other participant in) any
Competitive Business within the Restricted Market; provided that
he may own an interest in Mobile-One and he may also be employed
by Mobile-One as long as Mobile-One's business is not expanded to
include any other Competitive Business (It is agreed that Mobile-
One's business currently is the retail sale and installation of
car stereos, mobile communication devices, automobile anti-theft
devices and other electronic devices designed for use in
automobiles);
(ii) solicit, induce, influence or attempt to
influence any customer, supplier, distributor, sales agent,
lender, lessor or any other person who has a business
relationship with the Company, or who on the date of this
Agreement had a business relationship with the Company or had in
the past year engaged in discussions or negotiations to enter
into a business relationship with the Company, to discontinue or
reduce the extent of such relationship with the Company;
(iii) recruit, solicit or otherwise induce,
influence or attempt to influence any employee or agent of the
Company to discontinue such employment or relationship with the
Company, or employ or seek to employ, or cause or permit any
Competitive Business to employ or seek to employ, any person who
is then (or was at any time within one year prior to the date
Consultant, his Affiliates or Associates, or the Competitive
Business employs or seeks to employ such person) employed by the
Company; or
(iv) use the Campo name in any Competitive
Business.
(b) Each of the covenants in subsection (a) of this
Section shall be binding for the lesser of two years from the
date hereof or the maximum period of time under applicable law
for which a natural person or corporation may agree not to
compete in connection with the provision of consulting services.
4. Status of Consultant. (a) The parties agree that
Consultant is an independent contractor and not an employee of
the Company. Accordingly, Consultant acknowledges that he will
(i) not be eligible or entitled to participate in any employee
benefit plans, arrangements, distributions, insurance or other
similar benefits that may be provided by the Company to its
employees, (ii) not be treated as an employee for purposes of any
law regarding income tax withholding or for purposes of
contributions required by any unemployment, insurance or
compensatory program, and (iii) be solely responsible for the
payment of, and will pay when due, any taxes or assessments
imposed on account of the compensation to or the services by him
pursuant hereto, including, without limitation, any unemployment
insurance tax, federal, state or local income taxes, federal
social security payments, state disability insurance taxes and
foreign taxes. Consultant agrees to indemnify and hold harmless
the Company from any liabilities, claims, losses or expenses
arising out of his breach of this Section 4, which obligation
shall survive the termination of this Agreement.
(b) Consultant will not, and has no authority to,
represent to others that he is an employee or agent of the
Company. Except as expressly authorized in writing by the
Company, Consultant has no authority to bind or obligate the
Company, to use the name of the Company or any of its Affiliates
in any manner whatsoever, or to represent to others that he has
any such authority.
5. Term; Termination. (a) Unless earlier terminated
pursuant to subsection (b), this Agreement shall terminate on the
second anniversary of the date hereof.
(b) Notwithstanding anything to the contrary contained
herein, this Agreement may be terminated by:
(i) either party in the event of a material
breach by the other of them of any covenant or agreement
contained herein, which cannot be cured within 10 days after
written notice of such breach is given to the party committing
such breach;
(ii) the Company, upon the Consultant's death,
incapacity or interdiction; or
(iii) the mutual written consent of both parties
hereto in whole or in part at any time.
(c) Except as otherwise provided herein, upon
termination of this Agree-ment under this Section 5, all
obligations of the Company and Consultant hereunder shall cease;
except that the obligations of Consultant under Section 3
hereunder shall survive for the periods of time set forth in
subsection 3(b) hereof. If this Agreement is terminated by
Consultant pursuant to subsection (b)(i) above, all amounts owed
him for the unexpired term hereof shall become immediately due
and payable in full to him within 30 days of such termination.
6. Notices. Any notice, communication, request, reply,
consent, advice or disclosure notice ("Notice") required or
permitted to be given in connection herewith must be in writing
and may be given by (i) depositing it in the United States mail,
postage prepaid and registered or certified with return receipt
requested, (ii) hand delivery, or (iii) sending it by an express
air mail courier service for next business day delivery,
facsimile or e-mail. Notice deposited in the mail shall be
effective 72 hours thereafter; otherwise it shall be effective
upon delivery. For purposes of Notice, the addresses of the
parties shall, until changed as hereinafter provided, be as
follows:
(a) If to the Company:
104 Northpark Blvd.
Covington, La.
Attention: President
(b) If to Consultant:
104 Chipola Court
Mandeville, La.
or such other address as either party shall specify by Notice to
the other party.
8. Complete Agreement; No Amendment. This Agreement is
the entire under-standing between the parties with respect to the
matters provided for herein, and all prior discussions,
negotiations, commitments, writings and understandings related
hereto are hereby superseded. This Agreement shall not be
amended or modified except by the written agreement of the
parties.
9. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their
successors and permitted assigns. Consultant may not assign
either his rights or obligations hereunder without the Company's
prior written consent.
10. Remedies. The parties agree that if Consultant
breaches or is about to breach any provision hereof, the damage
to the Company will be substantial, although difficult to
ascertain, and money damages may not afford it an adequate
remedy, and it shall be entitled, in addition to all other rights
and remedies as may be available to it at law or in equity, to
specific performance and injunctive and other equitable relief to
prevent or restrain a breach.
11. Governing Law. The construction and interpretation of
this Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Louisiana, provided,
however, that any dispute regarding the reasonableness of the
covenants and agreements in Section 3 hereof, or the territorial
scope or duration thereof, shall be governed by the laws
applicable to such dispute.
12. Waivers. The Company will not be deemed as a
consequence of any act, delay, failure, omission, forbearance or
other indulgence granted by it from time to time or for any other
reason to have: (a) waived, or to be estopped from exercising,
any of its rights or remedies hereunder or (b) modified, changed,
amended, terminated, rescinded, or superseded any of the terms
hereof, unless it does so expressly, in a writing signed by a
duly authorized officer. No single or partial exercise by the
Company of any right or remedy will preclude other or further
exercise thereof or the exercise of any other right or remedy,
and a waiver expressly made in writing on one occasion will be
effective only in that specific instance and only for the precise
purpose for which given, and will not be construed as a consent
to or a waiver of any right or remedy on any future occasion. No
notice or demand will entitle its recipient to any other or
future notice or demand in similar or other circumstances.
13. Severability. Consultant acknowledges that (a) the
geographic scope of the covenants contained herein is the result
of arm's-length bargaining and is fair and reasonable in light of
the nature of the operations of the Business and that some or all
facets of the Business have been conducted throughout the
Restricted Market and (b) such covenants are given as an integral
part of his obligation to provide services pursuant to Section 2
hereof. It is the desire, intent and agreement of the parties
that the provisions of this Agreement be enforced to the fullest
extent permitted under the laws and public policies applied in
each jurisdiction in which enforcement is sought, and if the
duration, geographical scope or any other provision of the
covenants herein are determined to be invalid or unenforceable in
any jurisdiction, then they will negotiate in good faith to
modify or limit the scope of such covenants in a manner that they
believe, after consultation with their respective counsel, will
result in such covenants being enforceable in such jurisdiction,
it being the intent of this provision that such modification or
limitation will apply only with respect to such jurisdiction and
that the Company shall at all times have the benefit of the
covenants contained herein, except to the extent otherwise
required by any such modification or limitation. Without
limiting the generality of the foregoing, the parties acknowledge
that the covenants in subsections (i) through (iii) of Section
3(a) and in Sections 3(b), 3(c) and 3(d) are each intended to be
separate and divisible, and if, for any reason, any one or more
shall be determined to be invalid or unenforceable, in whole or
in part, such determination shall not be held to affect the
validity or enforceability of any other such covenant or portion
thereof.
14. Determinations. Any good faith determination by the
Board of Directors that a business or line of business
constitutes a Competitive Business shall be final and binding.
15. Acknowledgment. Consultant hereby acknowledges that he
has read, understands and expressly agrees to the terms of this
Agreement, including without limitation the provisions governing
the length of his agreements not to compete and the choice of
governing law.
IN WITNESS WHEREOF, the parties hereto have duly authorized,
executed and delivered this Agreement as of the date first above
written.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ RON FORMAN
/s/ ANTHONY P. CAMPO
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Agreement is dated as of the 21st day of March,
1997, between Campo Electronics, Appliances and Computers,
Inc. (the "Company") and Rex O. Corley, Jr. (the
"Employee").
1. Employment/Capacity. The Company agrees to and
does hereby employ the Employee, and the Employee agrees to
and does hereby remain in the employ of the Company, upon
the terms and conditions set forth in this Agreement. Such
employment shall be in the capacity of Acting Chairman of
the Board and Chief Executive Officer of the Company,
subject to the supervision of the Company's Board of
Directors. Such employment shall commence on the date of
this Agreement (the "Effective Date") and shall continue
until the second anniversary of the date of this Agreement
unless sooner terminated as provided in this Agreement. As
used in this Agreement, the phrase "term of this Agreement"
shall be deemed to include the period subsequent to the
Effective Date through the earlier of termination of
Employee's employment with the Company or the second
anniversary of the date of this Agreement; however, such
phrase shall not be construed as limiting the enforceability
by either party of any rights provided for in this
Agreement.
2. Time and Effort/Absences. During the term of this
Agreement, the Employee shall devote his entire time and
attention during normal business hours to the Company's
business, and he shall not engage in any other business
activity whether or not for gain, profit or other pecuniary
advantage, but nothing shall be construed to restrict him
(i) from performing services as a member of the Board of
Directors, Board of Trustees or the like of any non-profit
or for-profit entity whether or not he receives compensation
therefor, provided that such services do not unreasonably
interfere with his ability to perform the services and
discharge his responsibilities hereunder, (ii) from
investing his assets in such form or manner as will not
require any services on his part in the operation of the
business of the entity in which such investment is made,
and/or (iii) from serving in various capacities with, and
attending meetings of, industry groups and associations
relevant to the Company's business.
3. Corporate Offices. If elected, the Employee will
serve, without additional compensation, as a director of the
Company and/or as an officer and director (or in either
capacity) of any subsidiary of the Company. The Company
agrees during Employee's employment hereunder to:
(i) maintain, if available at a cost acceptable to
the Board of Directors in its discretion, director and
officer liability insurance for the Employee in
connection with his serving in all such capacities in
an amount and on such terms as are currently in effect
for officers and directors of the Company or, if
reduced, as are reasonably satisfactory to the Employ-
ee; and
(ii) use its reasonable best efforts to maintain
the director and officer exculpation and
indemnification provisions currently provided in its
Articles of Incorporation and By-laws and, if Louisiana
law at any time permits more protection than currently
provided, use its best efforts to add such additional
protection.
4. Salary/Bonus/Other Benefits. In consideration of
the services and duties to be rendered and performed by the
Employee during the term of this Agreement, the Company
agrees that it will, during the term of this Agreement, pay
and provide for the Employee the compensation and benefits
described below and described elsewhere in this Agreement
and the Appendices hereto:
a. Salary. A salary, payable in equal bi-weekly
installments, at the annualized rate provided in Appendix A
hereto, or in such greater amount as may from time to time
be fixed by the Board of Directors of the Company or any
duly authorized committee thereof. The Employee's salary
rate shall not be reduced without his written consent.
b. Bonus. A bonus or bonuses in such amount as
described and as may from time to time be fixed in
accordance with Appendix A hereto.
c. Other Benefits. The other payments and/or
benefits described in Appendix B hereto.
d. Withholding. All such payments shall be net
of applicable withholding for taxes and other required
amounts ("Withholding").
5. Expenses. The Employee shall be reimbursed for
out-of-pocket expenses incurred from time to time on behalf
of the Company or any subsidiary in the performance of his
duties under this Agreement, upon the presentation of such
supporting documents and forms as the Company shall
reasonably request.
6. Disability. If the Employee becomes Disabled (such
term is used as defined in Section 1.5 of the Company's
Severance Pay Plan and Summary Plan Description) during the
term of this Agreement the Company shall have the continuing
right and option while such disability continues by notice
in writing to the Employee to terminate this Agreement
effective thirty days after such notice is so given, unless
within such thirty day period he becomes capable of
rendering full time services of the character contemplated
hereby and he resumes such services. If the Employee
becomes Disabled, as aforesaid, the Company shall be
obligated to provide to him the amounts and benefits
described in Appendix C hereto (less Withholding) in lieu of
all other amounts and benefits provided by this Agreement.
7. Death. If Employee dies during the term of this
Agreement, this Agreement will terminate and the Company
shall be obligated to provide his personal representative(s)
and/or his beneficiaries with the amounts and death benefits
described in Appendix C hereto (less Withholding) in lieu of
all other amounts and benefits provided by this Agreement.
8. Severance or Termination Pay and Benefits. If the
employment of the Employee is terminated at any time during
the term of this Agreement (i) by him for Good Reason (as
defined in Paragraph 9 hereof) or (ii) by the Company for
any reason other than for Cause (as hereafter defined), the
Company shall be obligated to pay to him the severance pay
and benefits described in Appendix D hereto (less
Withholding) in lieu of all other amounts and benefits
provided by this Agreement. If the employment of Employee
is terminated at any time during the term of this Agreement
(i) by him without Good Reason or (ii) by the Company for
Cause, the Company shall be obligated to pay the Employee
the termination and other benefits described in Appendix E
hereto (less Withholding) in lieu of all other amounts and
benefits provided by this Agreement. Termination of the
Employee's employment on account of his Disability or death
will not require the Company to pay and provide any amounts
and benefits pursuant to Appendix D or E, but instead to pay
and provide the amounts and benefits described in Appendix
C.
As used herein, the term "Cause" means (i) the willful
and continuing failure by the Employee to perform
substantially the services contemplated (other than any such
failure resulting from his Disability) within a reasonable
period of time after a written demand for substantial
performance is delivered to him by a duly authorized member
or representative of the Company's Board of Directors which
specifically identifies the manner in which it is alleged
that he has not substantially performed such services, or
(ii) the willful engaging by him in misconduct materially
injurious to the Company.
9. Termination by the Employee for Good Reason.
a. The termination by the Employee of his
employment for "Good Reason" during the term of this
Agreement shall be deemed a justifiable termination of his
employment and shall excuse him from the obligation to
render services under or relating to this Agreement. In
that event the Company shall be obligated to pay to the
Employee the amounts and benefits described in Appendix D
hereto in lieu of all others provided by this Agreement. As
used herein, the term "Good Reason" means:
1. the occurrence of any of the following:
(i) a change by the Company in his status, title or
position(s) as an officer of the Company which does not
represent a promotion from or enhancement of his status,
title and position, or (ii) the assignment of any duties or
responsibilities which are inconsistent with such status,
title or position, or (iii) any removal of the Employee from
or any failure to reappoint or reelect him to his position
except in connection with a justifiable termination by the
Company of his employment for Cause or on account of
Disability or death or the termination by the Employee of
his employment other than for Good Reason, provided in each
such case described in clauses (i), (ii) or (iii) that the
same continues for 10 days after written notice thereof by
the Employee to the Company specifying the alleged
occurrence; or
2. a reduction in his salary rate or a
failure by the Company to pay to the Employee when due any
installment of salary and/or any bonus required pursuant to
Appendix A or to pay when due any other amounts owing under
or relating to this Agreement, or to perform any of the
Company's material obligations under this Agreement, which
reduction or failure in any such case continues for a period
of ten days after written notice thereof is given by him to
the Company; or
3. the Company's requiring him to be based
anywhere other than within a 75-mile radius of the New
Orleans, Louisiana area except for required travel in the
ordinary course of the Company's business.
b. The filing by or against the Company of an
application seeking protection under the federal bankruptcy
laws, or the granting of such application, shall not of
itself constitute Good Reason, but the failure of the
Company to satisfy Paragraph 27 shall constitute Good
Reason.
c. Employee's right to terminate his employment for
Good Reason during the term of this Agreement shall continue
in effect until the Company notifies Employee in writing
that Good Reason exists specifying the provision of the
Agreement giving rise to the right to terminate and Employee
fails to exercise such right within 60 days of actual
receipt of such notice. Any such failure to exercise shall
not prevent Employee from exercising the right to terminate
for Good Reason with respect to any new occurrence
constituting Good Reason that follows such failure and is
not a continuation of a prior such occurrence.
10. Notice of Termination. Any purported notice of
termination by the Company or the Employee of the Employee's
employment shall be communicated in a writing delivered to
the other party as provided in Paragraph 18 hereof
(hereinafter a "Notice of Termination"). Any such Notice of
Termination that purports to terminate Employee's employment
for Cause or for Good Reason shall specify the termination
provision relied upon by the party giving such notice and
shall set forth in detail such facts and circumstances
claimed to provide a justified basis for termination under
the provision(s) so indicated.
11. Trade Secrets, Etc. Upon the termination of his
employment, the Employee agrees forthwith to deliver up to
the Company, and, during the term of this Agreement and for
15 years thereafter, not to disclose to any person, firm,
corporation, association or other entity other than the
Company (a "Third Person") for any reason or purpose
whatsoever other than as authorized by the Company or as
required by law or as necessary to the performance of his
duties to the Company, any confidential data in his
possession, whether produced by the Company or by him,
relating to the Company's business or any past, current or
prospective activity of the Company.
12. Customer List. The Employee recognizes and
acknowledges that any written list(s) of the customers,
suppliers and/or vendors of the Company, its subsidiaries
and affiliates, is a valuable, special and unique asset.
The Employee agrees that he will not during the term of this
Agreement or within 15 years thereafter, use for his own
personal benefit or disclose any such written list or any
part thereof, to any Third Person for any reason or purpose
whatsoever.
13. [Omitted]
14. Injunctive Relief. In the event of a breach or
threatened breach by the Employee of the provisions of
Paragraph 11 or 12 of this Agreement during or after the
term of this Agreement, the Company shall be entitled to an
injunction restraining the Employee from violation of such
paragraph. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedy it may have in
the event of breach of this Agreement by the Employee.
15. Certain Proprietary Rights. The Employee agrees to
and hereby does assign to the Company all his right, title
and interest in and to all inventions, business plans, work
models or procedures, whether or not patentable, which are
made or conceived solely or jointly by him:
a. At any time during the term of his employment
by the Company and during the course of or in connection
with his duties during the term of this Agreement, or
b. With the use of time or materials of the
Company. The Employee agrees to communicate to the Company
or its representatives all facts known to him concerning
such matters, to sign all rightful papers, make all rightful
oaths and generally, at the Company's expense to do
everything reasonably practicable (without expense to the
Employee) to aid the Company in obtaining and enforcing
proper legal protection for all such matters in all
countries and in vesting title to such matters in the
Company. At the Company's request (during or after the term
of this Agreement) and expense, the Employee will promptly
execute a specific assignment of title to the Company, and
perform any other acts reasonably necessary to implement the
foregoing assignment.
16. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of:
a. The Company, and any successors or assigns of
the Company, whether by way of a merger or consolidation, or
by way of the Company selling all or substantially all of
the assets of the Company, to a successor entity, or other-
wise; however, in the event of the assignment by the Company
of this Agreement, the Company shall nevertheless remain
liable and obligated to the Employee in accordance with the
terms hereof; and
b. The Employee, his estate, his executors,
administrators, heirs and beneficiaries, none of whom shall
be permitted to assign this Agreement or any rights or
obligations hereunder.
17. Expenses Relating to Enforcement of Rights. The
Company agrees to pay as incurred, to the full extent
permitted by law, all reasonable time-based legal fees and
expenses which the Employee may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the
Company, the Employee or others of the validity or
enforceability of, or liability under, any provision hereof
(including as a result of any contest by the Employee about
the amount of any payment pursuant to this Agreement),
provided that if it is determined by a court that the
position of Employee in any such contest is unreasonable or
frivolous, he shall be required to reimburse the Company for
his legal fees and expenses so paid by the Company.
18. Notices. Any notice or other communication
required under this Agreement shall be in writing, shall be
deemed to have been given and received when delivered in
person, or, if mailed, shall be deemed to have been given
when deposited in the United States mail, first class,
registered or certified, return receipt requested, with
proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be
addressed as follows:
If to the Company, addressed to:
Chief Executive Officer
Campo Electronics, Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor
Covington, LA 70433
with a copy to:
Barbara Treuting Casteix, Esq.
Barrios Kingsdorf & Casteix
701 Poydras Street, Suite 3650
New Orleans, LA 70139
If to the Employee, addressed to:
4100 Chateau Boulevard
Kenner, LA 70065
or such other address as to which any party hereto may have
notified the other in writing.
19. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of
Louisiana.
20. Entire Agreement. This Agreement, including
Appendices A through E, inclusive, all of which are herein
incorporated by reference and made a part hereof, and the
documents referred to herein, contain the entire understand-
ing between the Employee and the Company relating to the
employment of the Employee by the Company during the term of
this Agreement. No provision of this Agreement, including
the Appendices, may be modified or amended except by an
instrument in writing signed by both parties.
21. Severability. If any term or provision of this
Agreement, or the application thereof to any person or
circumstance, shall at any time or to any extent be invalid
or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and
enforced to the fullest extent permitted by law.
22. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach
thereof.
23. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all
other rights and remedies provided to them by applicable
law, rule or regulation.
24. Beneficiaries. Whenever this Agreement provides
for any payment to be made to the Employee's estate, such
payment may be made instead to such beneficiary or
beneficiaries as the Employee may have designated in writing
and filed with the Company. The Employee shall have the
right to revoke any such designation from time to time and
to redesignate any beneficiary or beneficiaries by written
notice to the Company.
25. No Obligation to Mitigate Damages. The Employee
shall not be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking
other employment or otherwise, nor shall the amount of any
payment provided for under this Agreement be reduced by any
compensation earned by the Employee as a result of
employment by another employer or by retirement or by other
benefits, either before the date of this Agreement or after
the date of termination of his employment with the Company
under this Agreement.
26. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute
one and the same instrument.
27. Bankruptcy Matters. The Company shall take all
necessary steps reasonably available to it so that amounts
payable hereunder shall not be subject to avoidance if the
Company comes under the protection of the federal bankruptcy
laws.
28. Continuation. Employee's employment under the
terms of this Agreement shall not be automatically continued
beyond the termination of this Agreement even if Employee's
employment by the Company continues thereafter. Any
continuation of this Agreement shall only be by express
written agreement of Employee and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ L. RONALD FORMAN
/s/ REX O. CORLEY, JR.
Rex O. Corley, Jr.
APPENDIX A
SALARY AND BONUSES
A. Salary. The annualized salary rate of Employee
during the first year of the term of the Agreement shall be
$200,000 and shall be $210,000 during the second year (the
"Base Salary").
B. Stay Bonus. The Company shall pay to the Employee
a one-time bonus of $200,000 (the "Stay Bonus"), in a lump
sum payment made within fifteen days after the Completion
Date, provided that the Employee is in the Company's full
time employ on the Completion Date. "Completion Date" means
the earliest of the following dates: (i) the date on which a
plan of reorganization for the Company is confirmed, whether
by a court in a reorganization proceeding or by private
agreement with all or substantially all of the Company's
material creditors (a "Reorganization Plan"); (ii) the date
on which there occurs a "Change of Control" (as such term is
defined in the Company's Severance Pay Plan); (iii) the date
on which there is entered an order adjudging the Company a
bankrupt under Chapter 7 of the federal Bankruptcy Code and
such order is either a final, nonappealable order or is
entered at the Company's request or with its consent; or
(iv) the second anniversary of the date of this Agreement.
Employee shall be entitled to receive, at the same time as
and in addition to the Stay Bonus, all interest paid on the
certificate of deposit described in paragraph E below.
C. Performance Bonus. The Company shall pay to the
Employee, upon execution of this Agreement, a one-time
performance bonus of $25,000 in consideration of services
previously performed by Employee for the Company.
D. Incentive Compensation. The Company's Board of
Directors shall use its reasonable best efforts to develop,
as soon as is practicable, and in no event later than 120
days after the date of the Agreement, an executive incentive
compensation program in which Employee shall be eligible to
participate. The program shall be developed after
consultation with an executive compensation consultant, and
Employee's rewards under such program shall be based on
goals designed to return the Company to a profitable
position during the term of this Agreement or the Employee's
continued employment with the Company following such term.
E. Security for Stay Bonus. To secure payment of the
Stay Bonus, the Company will, within five business days
after the date of this Agreement, grant the Employee a
perfected security interest in an interest-bearing
certificate of deposit (or similar arrangement) issued by an
institution reasonably acceptable to the Employee, in the
principal amount of the Stay Bonus.
APPENDIX B
OTHER BENEFITS
During the term of the Agreement:
A. Vacation. The Employee shall be entitled to three
weeks of noncumulative paid vacation time per year of
employment.
B. Medical Benefits. The Employee shall be entitled
to participate in the medical benefit plans provided by the
Company from time to time to its executive officers
generally.
C. Other Benefits. The Employee shall be eligible to
participate in any other benefit program provided by the
Company from time to time to its executive officers
generally.
APPENDIX C
DEATH OR DISABILITY
In the event of a termination of the Employee's
employment during the term of the Agreement for the
Employee's death or Disability, the Employee shall be
entitled to payment within not less than 30 days from the
date of termination of (a) his salary through the date of
termination to the extent not already paid, (b) if such
termination occurs prior to the Completion Date, that
proportion of the Stay Bonus (but not to exceed 100%
thereof) as is equal to the number of days from the date of
this Agreement until the date the Employee's employment
terminated, divided by the number of days from the date of
this Agreement through the Completion Date, if such Date is
then ascertainable by the Board of Directors with reasonable
certainty, or 365 if such Date is not so ascertainable, and
(c) his Performance Bonus, to the extent not already paid.
APPENDIX D
SEVERANCE
Severance pay and benefits to be provided to the
Employee if the Employee is terminated during the term of
the Agreement by the Company without Cause or the Employee
terminates his employment during the term of the Agreement
for Good Reason are as follows: (a) the Company shall pay to
the Employee the amounts that would be due (at the times
they would be due) had employment terminated by reason of
death or Disability and, in addition, an amount (payable
within 30 days after termination of employment) equal to the
additional salary and benefits Employee would have received
had his employment terminated at (i) the first anniversary
of the Agreement, or (ii) six months after its actual
termination, whichever amount is greater, less any portion
thereof that has previously been paid and less any severance
benefits that are payable to Employee under the Company's
Severance Pay Plan with respect to any "change of control"
that occurs prior to the termination of Employee's
employment; and (b) for a period ending on the earlier of
(i) 6 months from the date of termination of Employee's
employment or (ii) Employee's obtaining other full-time
permanent employment, the Company shall, at its sole expense
as incurred, provide the Employee with outplacement services
that are reasonable in scope and cost in relation to his
position. The following is an example of clause (a): if
employment terminates prior to the end of the first six
months of the term of this Agreement and Employee is
entitled to severance, clause (a)(i) would apply. If it
terminates at any time after the end of the first six months
of the term of this Agreement and Employee is entitled to
severance, clause (a)(ii) would apply.
APPENDIX E
TERMINATION
If the employment of Employee is terminated at any time
during the term of the Agreement (i) by Employee without
Good Reason, or (ii) by the Company for Cause, the Company
shall be obligated to Employee only for payment within not
less than 30 days from the date of termination of his salary
through the date of termination, to the extent not
previously paid.
June 19, 1997
Mr. Rex O. Corley, Jr.
4100 Chateau Blvd.
Kenner, LA 70065
Dear Rex:
This letter is to set forth the terms that have been freely
and mutually agreed upon by us in connection with your separation
from employment with the Company, effective July 12, 1997. The
Company's obligations under this letter agreement are subject to
approval by the Federal Bankruptcy Court in the Company's
reorganization proceedings currently pending in Federal
Bankruptcy Court in New Orleans, Louisiana. Except with respect
to your resignation in all capacities as an executive officer of
the Company and your resignation from the Board of Directors of
the Company which shall be effective on June 20, 1997, neither
you nor the Company shall be bound by the provisions of this
letter agreement until such approval is obtained.
In satisfaction of all of its obligations under your
Employment Agreement dated March 21, 1997 (the "Agreement"), the
Company will pay to you the sum of $150,000 (the "Severance
Payment"), less applicable withholding for taxes, payable as set
forth in Attachment I.
You and the Company agree that the $200,000 U.S. Treasury
Bill held by Merrill Lynch in Account No. 53L-07049 in the name
of the Company, in which Treasury Bill you were granted a
security interest to secure certain obligations of the Company
under the Agreement, will be liquidated and $102,075 of the
proceeds derived therefrom will be deposited into a money market
account at Merrill Lynch (the "Severance Payment Account"). You
and the Company agree to authorize Merrill Lynch to disburse,
from the Severance Payment Account, the net amount of the
Severance Payment directly to you on the dates and in the amounts
set forth in Attachment I. The Company will grant you a perfected
security interest in the Severance Payment Account.
In exchange for the above described consideration, the value
and sufficiency of which is hereby acknowledged, you agree to
voluntarily release the Company and its affiliates, officers,
agents, directors, employees, shareholders and insurers from any
and all claims of whatsoever nature and kind which may have
arisen from any act done, or not done, relating in any way to
your employment with the Company and its affiliates, including,
but not limited to, the Agreement, the Company's Severance Pay
Plan and Summary Plan Description, and any alleged violation of
Title VII of the Civil Rights Act of 1964, the Age Discrimination
Act of 1967, the Employee Retirement Income Security Act (ERISA),
the Fair Labor Standards Act, the Americans With Disabilities
Act, and any other federal, state or local law, regulation or
ordinance.
You and the Company further agree that, in consideration for
the payments and other obligations undertaken by the Company
pursuant to this letter agreement, you will (i) resign from the
Board of Directors of the Company as of June 20, 1997; and (ii)
return all Company property, if any, in your possession.
You and the Company both agree that neither party will
display, discuss or publicize this letter agreement, the
underlying terms of this agreement or the facts and circumstances
leading to the separation of your employment with the Company,
except as necessary to comply with applicable laws and legal
process. You understand that disclosure of the terms is required
by federal securities law.
This letter agreement supercedes any and all other
agreements, either oral or in writing, between us with respect to
your employment with the Company and contains all the agreements
between us with respect to such employment, except that you will
continue to comply with Paragraphs 11 and 12 of the Agreement in
accordance with its terms.
The construction and interpretation of this letter agreement
shall be governed by and construed and enforced in accordance
with the laws of the State of Louisiana.
By signing this letter agreement, you acknowledge that you
have read, understand and agree to be bound by the terms and
conditions set forth herein.
Very truly yours,
CAMPO ELECTRONICS, APPLIANCES AND
COMPUTERS, INC.
By: /s/ L. RONALD FORMAN
L. Ronald Forman,
Chairman, Management
Committee and Member,
Compensation Committee
AGREED TO AND ACCEPTED
THIS 19TH DAY OF JUNE, 1997.
/s/ REX O. CORLEY, JR.
REX O. CORLEY, JR.
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Agreement is dated as of the 21st day of March,
1997, between Campo Electronics, Appliances and Computers,
Inc. (the "Company") and Charles S. Gibson, Jr. (the
"Employee").
1. Employment/Capacity. The Company agrees to and
does hereby employ the Employee, and the Employee agrees to
and does hereby remain in the employ of the Company, upon
the terms and conditions set forth in this Agreement. Such
employment shall be in the capacity of Vice President -
Logistics & Operations, subject to the supervision of the
Company's Board of Directors and Chief Executive Officer.
Such employment shall commence on the date of this Agreement
(the "Effective Date") and shall continue until the second
anniversary of the date of this Agreement unless sooner
terminated as provided in this Agreement. As used in this
Agreement, the phrase "term of this Agreement" shall be
deemed to include the period subsequent to the Effective
Date through the earlier of termination of Employee's
employment with the Company or the second anniversary of the
date of this Agreement; however, such phrase shall not be
construed as limiting the enforceability by either party of
any rights provided for in this Agreement.
2. Time and Effort/Absences. During the term of this
Agreement, the Employee shall devote his entire time and
attention during normal business hours to the Company's
business, and he shall not engage in any other business
activity whether or not for gain, profit or other pecuniary
advantage, but nothing shall be construed to restrict him
(i) from performing services as a member of the Board of
Directors, Board of Trustees or the like of any non-profit
or for-profit entity whether or not he receives compensation
therefor, provided that such services do not unreasonably
interfere with his ability to perform the services and
discharge his responsibilities hereunder, (ii) from
investing his assets in such form or manner as will not
require any services on his part in the operation of the
business of the entity in which such investment is made,
and/or (iii) from serving in various capacities with, and
attending meetings of, industry groups and associations
relevant to the Company's business.
3. Corporate Offices. If elected, the Employee will
serve, without additional compensation, as a director of the
Company and/or as an officer and director (or in either
capacity) of any subsidiary of the Company. The Company
agrees during Employee's employment hereunder to:
(i) maintain, if available at a cost acceptable to
the Board of Directors in its discretion, director and
officer liability insurance for the Employee in
connection with his serving in all such capacities in
an amount and on such terms as are currently in effect
for officers and directors of the Company or, if
reduced, as are reasonably satisfactory to the Employ-
ee; and
(ii) use its reasonable best efforts to maintain
the director and officer exculpation and
indemnification provisions currently provided in its
Articles of Incorporation and By-laws and, if Louisiana
law at any time permits more protection than currently
provided, use its best efforts to add such additional
protection.
4. Salary/Bonus/Other Benefits. In consideration of
the services and duties to be rendered and performed by the
Employee during the term of this Agreement, the Company
agrees that it will, during the term of this Agreement, pay
and provide for the Employee the compensation and benefits
described below and described elsewhere in this Agreement
and the Appendices hereto:
a. Salary. A salary, payable in equal bi-weekly
installments, at the annualized rate provided in Appendix A
hereto, or in such greater amount as may from time to time
be fixed by the Board of Directors of the Company or any
duly authorized committee thereof. The Employee's salary
rate shall not be reduced without his written consent.
b. Bonus. A bonus or bonuses in such amount as
described and as may from time to time be fixed in
accordance with Appendix A hereto.
c. Other Benefits. The other payments and/or
benefits described in Appendix B hereto.
d. Withholding. All such payments shall be net
of applicable withholding for taxes and other required
amounts ("Withholding").
5. Expenses. The Employee shall be reimbursed for
out-of-pocket expenses incurred from time to time on behalf
of the Company or any subsidiary in the performance of his
duties under this Agreement, upon the presentation of such
supporting documents and forms as the Company shall
reasonably request.
6. Disability. If the Employee becomes Disabled (such
term is used as defined in Section 1.5 of the Company's
Severance Pay Plan and Summary Plan Description) during the
term of this Agreement the Company shall have the continuing
right and option while such disability continues by notice
in writing to the Employee to terminate this Agreement
effective thirty days after such notice is so given, unless
within such thirty day period he becomes capable of
rendering full time services of the character contemplated
hereby and he resumes such services. If the Employee
becomes Disabled, as aforesaid, the Company shall be
obligated to provide to him the amounts and benefits
described in Appendix C hereto (less Withholding) in lieu of
all other amounts and benefits provided by this Agreement.
7. Death. If Employee dies during the term of this
Agreement, this Agreement will terminate and the Company
shall be obligated to provide his personal representative(s)
and/or his beneficiaries with the amounts and death benefits
described in Appendix C hereto (less Withholding) in lieu of
all other amounts and benefits provided by this Agreement.
8. Severance or Termination Pay and Benefits. If the
employment of the Employee is terminated at any time during
the term of this Agreement (i) by him for Good Reason (as
defined in Paragraph 9 hereof) or (ii) by the Company for
any reason other than for Cause (as hereafter defined), the
Company shall be obligated to pay to him the severance pay
and benefits described in Appendix D hereto (less
Withholding) in lieu of all other amounts and benefits
provided by this Agreement. If the employment of Employee
is terminated at any time during the term of this Agreement
(i) by him without Good Reason or (ii) by the Company for
Cause, the Company shall be obligated to pay the Employee
the termination and other benefits described in Appendix E
hereto (less Withholding) in lieu of all other amounts and
benefits provided by this Agreement. Termination of the
Employee's employment on account of his Disability or death
will not require the Company to pay and provide any amounts
and benefits pursuant to Appendix D or E, but instead to pay
and provide the amounts and benefits described in Appendix
C.
As used herein, the term "Cause" means (i) the willful
and continuing failure by the Employee to perform
substantially the services contemplated (other than any such
failure resulting from his Disability) within a reasonable
period of time after a written demand for substantial
performance is delivered to him by a duly authorized member
or representative of the Company's Board of Directors which
specifically identifies the manner in which it is alleged
that he has not substantially performed such services, or
(ii) the willful engaging by him in misconduct materially
injurious to the Company.
9. Termination by the Employee for Good Reason.
a. The termination by the Employee of his
employment for "Good Reason" during the term of this
Agreement shall be deemed a justifiable termination of his
employment and shall excuse him from the obligation to
render services under or relating to this Agreement. In
that event the Company shall be obligated to pay to the
Employee the amounts and benefits described in Appendix D
hereto in lieu of all others provided by this Agreement. As
used herein, the term "Good Reason" means:
1. the occurrence of any of the following:
(i) a change by the Company in his status, title or
position(s) as an officer of the Company which does not
represent a promotion from or enhancement of his status,
title and position, or (ii) the assignment of any duties or
responsibilities which are inconsistent with such status,
title or position, or (iii) any removal of the Employee from
or any failure to reappoint or reelect him to his position
except in connection with a justifiable termination by the
Company of his employment for Cause or on account of
Disability or death or the termination by the Employee of
his employment other than for Good Reason, provided in each
such case described in clauses (i), (ii) or (iii) that the
same continues for 10 days after written notice thereof by
the Employee to the Company specifying the alleged
occurrence; or
2. a reduction in his salary rate or a
failure by the Company to pay to the Employee when due any
installment of salary and/or any bonus required pursuant to
Appendix A or to pay when due any other amounts owing under
or relating to this Agreement, or to perform any of the
Company's material obligations under this Agreement, which
reduction or failure in any such case continues for a period
of ten days after written notice thereof is given by him to
the Company; or
3. the Company's requiring him to be based
anywhere other than within a 75-mile radius of the New
Orleans, Louisiana area except for required travel in the
ordinary course of the Company's business.
b. The filing by or against the Company of an
application seeking protection under the federal bankruptcy
laws, or the granting of such application, shall not of
itself constitute Good Reason, but the failure of the
Company to satisfy Paragraph 27 shall constitute Good
Reason.
c. Employee's right to terminate his employment for
Good Reason during the term of this Agreement shall continue
in effect until the Company notifies Employee in writing
that Good Reason exists specifying the provision of the
Agreement giving rise to the right to terminate and Employee
fails to exercise such right within 60 days of actual
receipt of such notice. Any such failure to exercise shall
not prevent Employee from exercising the right to terminate
for Good Reason with respect to any new occurrence
constituting Good Reason that follows such failure and is
not a continuation of a prior such occurrence.
10. Notice of Termination. Any purported notice of
termination by the Company or the Employee of the Employee's
employment shall be communicated in a writing delivered to
the other party as provided in Paragraph 18 hereof
(hereinafter a "Notice of Termination"). Any such Notice of
Termination that purports to terminate Employee's employment
for Cause or for Good Reason shall specify the termination
provision relied upon by the party giving such notice and
shall set forth in detail such facts and circumstances
claimed to provide a justified basis for termination under
the provision(s) so indicated.
11. Trade Secrets, Etc. Upon the termination of his
employment, the Employee agrees forthwith to deliver up to
the Company, and, during the term of this Agreement and for
15 years thereafter, not to disclose to any person, firm,
corporation, association or other entity other than the
Company (a "Third Person") for any reason or purpose
whatsoever other than as authorized by the Company or as
required by law or as necessary to the performance of his
duties to the Company, any confidential data in his
possession, whether produced by the Company or by him,
relating to the Company's business or any past, current or
prospective activity of the Company.
12. Customer List. The Employee recognizes and
acknowledges that any written list(s) of the customers,
suppliers and/or vendors of the Company, its subsidiaries
and affiliates, is a valuable, special and unique asset.
The Employee agrees that he will not during the term of this
Agreement or within 15 years thereafter, use for his own
personal benefit or disclose any such written list or any
part thereof, to any Third Person for any reason or purpose
whatsoever.
13. [Omitted]
14. Injunctive Relief. In the event of a breach or
threatened breach by the Employee of the provisions of
Paragraph 11 or 12 of this Agreement during or after the
term of this Agreement, the Company shall be entitled to an
injunction restraining the Employee from violation of such
paragraph. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedy it may have in
the event of breach of this Agreement by the Employee.
15. Certain Proprietary Rights. The Employee agrees to
and hereby does assign to the Company all his right, title
and interest in and to all inventions, business plans, work
models or procedures, whether or not patentable, which are
made or conceived solely or jointly by him:
a. At any time during the term of his employment
by the Company and during the course of or in connection
with his duties during the term of this Agreement, or
b. With the use of time or materials of the
Company. The Employee agrees to communicate to the Company
or its representatives all facts known to him concerning
such matters, to sign all rightful papers, make all rightful
oaths and generally, at the Company's expense to do
everything reasonably practicable (without expense to the
Employee) to aid the Company in obtaining and enforcing
proper legal protection for all such matters in all
countries and in vesting title to such matters in the
Company. At the Company's request (during or after the term
of this Agreement) and expense, the Employee will promptly
execute a specific assignment of title to the Company, and
perform any other acts reasonably necessary to implement the
foregoing assignment.
16. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of:
a. The Company, and any successors or assigns of
the Company, whether by way of a merger or consolidation, or
by way of the Company selling all or substantially all of
the assets of the Company, to a successor entity, or other-
wise; however, in the event of the assignment by the Company
of this Agreement, the Company shall nevertheless remain
liable and obligated to the Employee in accordance with the
terms hereof; and
b. The Employee, his estate, his executors,
administrators, heirs and beneficiaries, none of whom shall
be permitted to assign this Agreement or any rights or
obligations hereunder.
17. Expenses Relating to Enforcement of Rights. The
Company agrees to pay as incurred, to the full extent
permitted by law, all reasonable time-based legal fees and
expenses which the Employee may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the
Company, the Employee or others of the validity or
enforceability of, or liability under, any provision hereof
(including as a result of any contest by the Employee about
the amount of any payment pursuant to this Agreement),
provided that if it is determined by a court that the
position of Employee in any such contest is unreasonable or
frivolous, he shall be required to reimburse the Company for
his legal fees and expenses so paid by the Company.
18. Notices. Any notice or other communication
required under this Agreement shall be in writing, shall be
deemed to have been given and received when delivered in
person, or, if mailed, shall be deemed to have been given
when deposited in the United States mail, first class,
registered or certified, return receipt requested, with
proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be
addressed as follows:
If to the Company, addressed to:
Chief Executive Officer
Campo Electronics, Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor
Covington, LA 70433
with a copy to:
Barbara Treuting Casteix, Esq.
Barrios Kingsdorf & Casteix
701 Poydras Street, Suite 3650
New Orleans, LA 70139
If to the Employee, addressed to:
33 Laurel Oak
Covington, LA 70433
or such other address as to which any party hereto may have
notified the other in writing.
19. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of
Louisiana.
20. Entire Agreement. This Agreement, including
Appendices A through E, inclusive, all of which are herein
incorporated by reference and made a part hereof, and the
documents referred to herein, contain the entire understand-
ing between the Employee and the Company relating to the
employment of the Employee by the Company during the term of
this Agreement. No provision of this Agreement, including
the Appendices, may be modified or amended except by an
instrument in writing signed by both parties.
21. Severability. If any term or provision of this
Agreement, or the application thereof to any person or
circumstance, shall at any time or to any extent be invalid
or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and
enforced to the fullest extent permitted by law.
22. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach
thereof.
23. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all
other rights and remedies provided to them by applicable
law, rule or regulation.
24. Beneficiaries. Whenever this Agreement provides
for any payment to be made to the Employee's estate, such
payment may be made instead to such beneficiary or
beneficiaries as the Employee may have designated in writing
and filed with the Company. The Employee shall have the
right to revoke any such designation from time to time and
to redesignate any beneficiary or beneficiaries by written
notice to the Company.
25. No Obligation to Mitigate Damages. The Employee
shall not be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking
other employment or otherwise, nor shall the amount of any
payment provided for under this Agreement be reduced by any
compensation earned by the Employee as a result of
employment by another employer or by retirement or by other
benefits, either before the date of this Agreement or after
the date of termination of his employment with the Company
under this Agreement.
26. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute
one and the same instrument.
27. Bankruptcy Matters. The Company shall take all
necessary steps reasonably available to it so that amounts
payable hereunder shall not be subject to avoidance if the
Company comes under the protection of the federal bankruptcy
laws.
28. Continuation. Employee's employment under the
terms of this Agreement shall not be automatically continued
beyond the termination of this Agreement even if Employee's
employment by the Company continues thereafter. Any
continuation of this Agreement shall only be by express
written agreement of Employee and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ REX O. CORLEY, JR.
/s/ CHARLES S. GIBSON, JR.
Charles S. Gibson, Jr.
APPENDIX A
SALARY AND BONUSES
A. Salary. The annualized salary rate of Employee
during the first year of the term of the Agreement shall be
$150,000 and shall be $157,500 during the second year (the
"Base Salary").
B. Stay Bonus. The Company shall pay to the Employee
a one-time bonus of $150,000 (the "Stay Bonus"), in a lump
sum payment made within fifteen days after the Completion
Date, provided that the Employee is in the Company's full
time employ on the Completion Date. "Completion Date" means
the earliest of the following dates: (i) the date on which a
plan of reorganization for the Company is confirmed, whether
by a court in a reorganization proceeding or by private
agreement with all or substantially all of the Company's
material creditors (a "Reorganization Plan"); (ii) the date
on which there occurs a "Change of Control" (as such term is
defined in the Company's Severance Pay Plan); (iii) the date
on which there is entered an order adjudging the Company a
bankrupt under Chapter 7 of the federal Bankruptcy Code and
such order is either a final, nonappealable order or is
entered at the Company's request or with its consent; or
(iv) the second anniversary of the date of this Agreement.
Employee shall be entitled to receive, at the same time as
and in addition to the Stay Bonus, all interest paid on the
certificate of deposit described in paragraph E below.
C. Performance Bonus. The Company shall pay to the
Employee, upon execution of this Agreement, a one-time
performance bonus of $25,000 in consideration of services
previously performed by Employee for the Company.
D. Incentive Compensation. The Company's Board of
Directors shall use its reasonable best efforts to develop,
as soon as is practicable, and in no event later than 120
days after the date of the Agreement, an executive incentive
compensation program in which Employee shall be eligible to
participate. The program shall be developed after
consultation with an executive compensation consultant, and
Employee's rewards under such program shall be based on
goals designed to return the Company to a profitable
position during the term of this Agreement or the Employee's
continued employment with the Company following such term.
E. Security for Stay Bonus. To secure payment of the
Stay Bonus, the Company will, within five business days
after the date of this Agreement, grant the Employee a
perfected security interest in an interest-bearing
certificate of deposit (or similar arrangement) issued by an
institution reasonably acceptable to the Employee, in the
principal amount of the Stay Bonus.
APPENDIX B
OTHER BENEFITS
During the term of the Agreement:
A. Vacation. The Employee shall be entitled to three
weeks of noncumulative paid vacation time per year of
employment.
B. Medical Benefits. The Employee shall be entitled
to participate in the medical benefit plans provided by the
Company from time to time to its executive officers
generally.
C. Other Benefits. The Employee shall be eligible to
participate in any other benefit program provided by the
Company from time to time to its executive officers
generally.
APPENDIX C
DEATH OR DISABILITY
In the event of a termination of the Employee's
employment during the term of the Agreement for the
Employee's death or Disability, the Employee shall be
entitled to payment within not less than 30 days from the
date of termination of (a) his salary through the date of
termination to the extent not already paid, (b) if such
termination occurs prior to the Completion Date, that
proportion of the Stay Bonus (but not to exceed 100%
thereof) as is equal to the number of days from the date of
this Agreement until the date the Employee's employment
terminated, divided by the number of days from the date of
this Agreement through the Completion Date, if such Date is
then ascertainable by the Board of Directors with reasonable
certainty, or 365 if such Date is not so ascertainable, and
(c) his Performance Bonus, to the extent not already paid.
APPENDIX D
SEVERANCE
Severance pay and benefits to be provided to the
Employee if the Employee is terminated during the term of
the Agreement by the Company without Cause or the Employee
terminates his employment during the term of the Agreement
for Good Reason are as follows: (a) the Company shall pay to
the Employee the amounts that would be due (at the times
they would be due) had employment terminated by reason of
death or Disability and, in addition, an amount (payable
within 30 days after termination of employment) equal to the
additional salary and benefits Employee would have received
had his employment terminated at (i) the first anniversary
of the Agreement, or (ii) six months after its actual
termination, whichever amount is greater, less any portion
thereof that has previously been paid and less any severance
benefits that are payable to Employee under the Company's
Severance Pay Plan with respect to any "change of control"
that occurs prior to the termination of Employee's
employment; and (b) for a period ending on the earlier of
(i) 6 months from the date of termination of Employee's
employment or (ii) Employee's obtaining other full-time
permanent employment, the Company shall, at its sole expense
as incurred, provide the Employee with outplacement services
that are reasonable in scope and cost in relation to his
position. The following is an example of clause (a): if
employment terminates prior to the end of the first six
months of the term of this Agreement and Employee is
entitled to severance, clause (a)(i) would apply. If it
terminates at any time after the end of the first six months
of the term of this Agreement and Employee is entitled to
severance, clause (a)(ii) would apply.
APPENDIX E
TERMINATION
If the employment of Employee is terminated at any time
during the term of the Agreement (i) by Employee without
Good Reason, or (ii) by the Company for Cause, the Company
shall be obligated to Employee only for payment within not
less than 30 days from the date of termination of his salary
through the date of termination, to the extent not
previously paid.
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
entered into this 24th day of June, 1997 by and between Campo
Electronics, Appliances and Computers, Inc.(the "Company") and
Charles S. Gibson, Jr. (the "Employee").
WITNESSETH:
WHEREAS, the Employee is presently employed by the Company
in the capacity of Vice President - Logistics & Operations, said
employment being pursuant to an Employment Agreement dated March
21, 1997 (the "Agreement"); and
WHEREAS, the Compensation Committee of the Board of
Directors of the Company (the "Committee") recognizes that the
Employee's contribution to the Company, in terms of both the
complexity of the Company's business that Employee has been asked
to handle and the enormous amount of time and attention devoted
by Employee after normal business hours to the Company's
business, has been substantially in excess of what was
anticipated at the time that the Agreement was executed; and
WHEREAS, the Committee desires to provide for the continued
employment of the Employee and to make certain modifications to
the Agreement, and the Employee desires to continue to serve the
Company upon the terms and conditions of the Agreement as herein
amended.
NOW, THEREFORE, in consideration of the premises and of the
respective representations and warranties and the mutual
covenants set forth in the Agreement, the parties hereto hereby
agree to amend the Agreement as follows:
1. Paragraph 2 of the Agreement is amended to require the
Employee to devote such time and attention after normal business
hours to the Company's business as is reasonably necessary and,
accordingly, Paragraph 2 of the Agreement is hereby revised to
read as follows:
2. Time and Effort/Absences. During the term
of this Agreement, the Employee shall devote
his entire time and attention during normal
business hours, and thereafter as reasonably
necessary, to the Company's business, and he
shall not engage in any other business
activity whether or not for gain, profit or
other pecuniary advantage, but nothing shall
be construed to restrict him (i) from
performing services as a member of the Board
of Directors, Board of Trustees or the like
of any non-profit or for-profit entity
whether or not he receives compensation
therefor, provided that such services do not
unreasonably interfere with his ability to
perform the services and discharge his
responsibilities hereunder, (ii) from
investing his assets in such form or manner
as will not require any services on his part
in the operation of the business of the
entity in which such investment is made,
and/or (iii) from serving in various
capacities with, and attending meetings of,
industry groups and associations relevant to
the Company's business.
2. The severance pay and benefits described in Appendix D
of the Agreement are revised to provide that the additional
salary and benefits that the Employee would have received had
his employment not terminated are payable at the times they would
otherwise be due rather than in a lump sum payment, and are
expanded to include the payment of the Stay Bonus in a lump sum
payment payable within 30 days after termination of employment.
Accordingly, the existing language of Appendix D to the Agreement
is deleted in its entirety and the following language is
substituted therefor:
APPENDIX D
SEVERANCE
Severance pay and benefits to be
provided to the Employee if the Employee is
terminated during the term of the Agreement
by the Company without Cause or the Employee
terminates his employment during the term of
the Agreement for Good Reason are as follows:
(a) the Company shall pay to the Employee
(payable within 15 days after termination of
employment) his salary and benefits through
the date of termination, to the extent not
already paid; (b) the Company shall pay to
the Employee the additional salary and
benefits that the Employee would have
received (at the times they would have been
paid) had his employment terminated at (i)
the first anniversary of the Agreement, or
(ii) six months after its actual termination,
whichever amount is greater, less any portion
thereof that has previously been paid and
less any severance benefits that are payable
to Employee under the Company's Severance Pay
Plan with respect to any "change of control"
that occurs prior to the termination of
Employee's employment; (c) the Company shall
pay the Stay Bonus to the Employee (payable
within 30 days after termination of
employment); and (d) for a period ending on
the earlier of (i) six months from the date
of termination of Employee's employment or
(ii) Employee's obtaining other full-time
permanent employment, the Company shall, at
its sole expense as incurred, provide the
Employee with outplacement services that are
reasonable in scope and cost in relation to
his position. The following is an example of
clause (b): if employment terminates prior to
the first six months of the term of this
Agreement and Employee is entitled to
severance, clause (b)(i) would apply. If it
terminates at any time after the end of the
first six months of the term of this
Agreement and Employee is entitled to
severance, clause (b)(ii) would apply.
3. Except as specifically amended herein, all other terms
and conditions of the Agreement shall remain unchanged and in
full force and effect, and the Agreement, as amended herein shall
constitute the entire understanding and agreement among the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
CAMPO ELECTRONICS, APPLIANCES AND
COMPUTERS, INC.
By: /s/ L. RONALD FORMAN
Name: L. Ronald Forman
Title: Chairman, Management
Committee & Member,
Compensation Committee
EMPLOYEE:
/s/ CHARLES S. GIBSON, JR.
CHARLES S. GIBSON, JR.
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Agreement is dated as of the 21st day of March,
1997, between Campo Electronics, Appliances and Computers,
Inc. (the "Company") and Wayne J. Usie (the "Employee").
1. Employment/Capacity. The Company agrees to and
does hereby employ the Employee, and the Employee agrees to
and does hereby remain in the employ of the Company, upon
the terms and conditions set forth in this Agreement. Such
employment shall be in the capacity of Vice President -
Information Systems, Chief Financial Officer and Secretary,
subject to the supervision of the Company's Board of
Directors and Chief Executive Officer. Such employment
shall commence on the date of this Agreement (the "Effective
Date") and shall continue until the second anniversary of
the date of this Agreement unless sooner terminated as
provided in this Agreement. As used in this Agreement, the
phrase "term of this Agreement" shall be deemed to include
the period subsequent to the Effective Date through the
earlier of termination of Employee's employment with the
Company or the second anniversary of the date of this
Agreement; however, such phrase shall not be construed as
limiting the enforceability by either party of any rights
provided for in this Agreement.
2. Time and Effort/Absences. During the term of this
Agreement, the Employee shall devote his entire time and
attention during normal business hours to the Company's
business, and he shall not engage in any other business
activity whether or not for gain, profit or other pecuniary
advantage, but nothing shall be construed to restrict him
(i) from performing services as a member of the Board of
Directors, Board of Trustees or the like of any non-profit
or for-profit entity whether or not he receives compensation
therefor, provided that such services do not unreasonably
interfere with his ability to perform the services and
discharge his responsibilities hereunder, (ii) from
investing his assets in such form or manner as will not
require any services on his part in the operation of the
business of the entity in which such investment is made,
and/or (iii) from serving in various capacities with, and
attending meetings of, industry groups and associations
relevant to the Company's business.
3. Corporate Offices. If elected, the Employee will
serve, without additional compensation, as a director of the
Company and/or as an officer and director (or in either
capacity) of any subsidiary of the Company. The Company
agrees during Employee's employment hereunder to:
(i) maintain, if available at a cost acceptable to
the Board of Directors in its discretion, director and
officer liability insurance for the Employee in
connection with his serving in all such capacities in
an amount and on such terms as are currently in effect
for officers and directors of the Company or, if
reduced, as are reasonably satisfactory to the Employ-
ee; and
(ii) use its reasonable best efforts to maintain
the director and officer exculpation and
indemnification provisions currently provided in its
Articles of Incorporation and By-laws and, if Louisiana
law at any time permits more protection than currently
provided, use its best efforts to add such additional
protection.
4. Salary/Bonus/Other Benefits. In consideration of
the services and duties to be rendered and performed by the
Employee during the term of this Agreement, the Company
agrees that it will, during the term of this Agreement, pay
and provide for the Employee the compensation and benefits
described below and described elsewhere in this Agreement
and the Appendices hereto:
a. Salary. A salary, payable in equal bi-weekly
installments, at the annualized rate provided in Appendix A
hereto, or in such greater amount as may from time to time
be fixed by the Board of Directors of the Company or any
duly authorized committee thereof. The Employee's salary
rate shall not be reduced without his written consent.
b. Bonus. A bonus or bonuses in such amount as
described and as may from time to time be fixed in
accordance with Appendix A hereto.
c. Other Benefits. The other payments and/or
benefits described in Appendix B hereto.
d. Withholding. All such payments shall be net
of applicable withholding for taxes and other required
amounts ("Withholding").
5. Expenses. The Employee shall be reimbursed for
out-of-pocket expenses incurred from time to time on behalf
of the Company or any subsidiary in the performance of his
duties under this Agreement, upon the presentation of such
supporting documents and forms as the Company shall
reasonably request.
6. Disability. If the Employee becomes Disabled (such
term is used as defined in Section 1.5 of the Company's
Severance Pay Plan and Summary Plan Description) during the
term of this Agreement the Company shall have the continuing
right and option while such disability continues by notice
in writing to the Employee to terminate this Agreement
effective thirty days after such notice is so given, unless
within such thirty day period he becomes capable of
rendering full time services of the character contemplated
hereby and he resumes such services. If the Employee
becomes Disabled, as aforesaid, the Company shall be
obligated to provide to him the amounts and benefits
described in Appendix C hereto (less Withholding) in lieu of
all other amounts and benefits provided by this Agreement.
7. Death. If Employee dies during the term of this
Agreement, this Agreement will terminate and the Company
shall be obligated to provide his personal representative(s)
and/or his beneficiaries with the amounts and death benefits
described in Appendix C hereto (less Withholding) in lieu of
all other amounts and benefits provided by this Agreement.
8. Severance or Termination Pay and Benefits. If the
employment of the Employee is terminated at any time during
the term of this Agreement (i) by him for Good Reason (as
defined in Paragraph 9 hereof) or (ii) by the Company for
any reason other than for Cause (as hereafter defined), the
Company shall be obligated to pay to him the severance pay
and benefits described in Appendix D hereto (less
Withholding) in lieu of all other amounts and benefits
provided by this Agreement. If the employment of Employee
is terminated at any time during the term of this Agreement
(i) by him without Good Reason or (ii) by the Company for
Cause, the Company shall be obligated to pay the Employee
the termination and other benefits described in Appendix E
hereto (less Withholding) in lieu of all other amounts and
benefits provided by this Agreement. Termination of the
Employee's employment on account of his Disability or death
will not require the Company to pay and provide any amounts
and benefits pursuant to Appendix D or E, but instead to pay
and provide the amounts and benefits described in Appendix
C.
As used herein, the term "Cause" means (i) the willful
and continuing failure by the Employee to perform
substantially the services contemplated (other than any such
failure resulting from his Disability) within a reasonable
period of time after a written demand for substantial
performance is delivered to him by a duly authorized member
or representative of the Company's Board of Directors which
specifically identifies the manner in which it is alleged
that he has not substantially performed such services, or
(ii) the willful engaging by him in misconduct materially
injurious to the Company.
9. Termination by the Employee for Good Reason.
a. The termination by the Employee of his
employment for "Good Reason" during the term of this
Agreement shall be deemed a justifiable termination of his
employment and shall excuse him from the obligation to
render services under or relating to this Agreement. In
that event the Company shall be obligated to pay to the
Employee the amounts and benefits described in Appendix D
hereto in lieu of all others provided by this Agreement. As
used herein, the term "Good Reason" means:
1. the occurrence of any of the following:
(i) a change by the Company in his status, title or
position(s) as an officer of the Company which does not
represent a promotion from or enhancement of his status,
title and position, or (ii) the assignment of any duties or
responsibilities which are inconsistent with such status,
title or position, or (iii) any removal of the Employee from
or any failure to reappoint or reelect him to his position
except in connection with a justifiable termination by the
Company of his employment for Cause or on account of
Disability or death or the termination by the Employee of
his employment other than for Good Reason, provided in each
such case described in clauses (i), (ii) or (iii) that the
same continues for 10 days after written notice thereof by
the Employee to the Company specifying the alleged
occurrence; or
2. a reduction in his salary rate or a
failure by the Company to pay to the Employee when due any
installment of salary and/or any bonus required pursuant to
Appendix A or to pay when due any other amounts owing under
or relating to this Agreement, or to perform any of the
Company's material obligations under this Agreement, which
reduction or failure in any such case continues for a period
of ten days after written notice thereof is given by him to
the Company; or
3. the Company's requiring him to be based
anywhere other than within a 75-mile radius of the New
Orleans, Louisiana area except for required travel in the
ordinary course of the Company's business.
b. The filing by or against the Company of an
application seeking protection under the federal bankruptcy
laws, or the granting of such application, shall not of
itself constitute Good Reason, but the failure of the
Company to satisfy Paragraph 27 shall constitute Good
Reason.
c. Employee's right to terminate his employment for
Good Reason during the term of this Agreement shall continue
in effect until the Company notifies Employee in writing
that Good Reason exists specifying the provision of the
Agreement giving rise to the right to terminate and Employee
fails to exercise such right within 60 days of actual
receipt of such notice. Any such failure to exercise shall
not prevent Employee from exercising the right to terminate
for Good Reason with respect to any new occurrence
constituting Good Reason that follows such failure and is
not a continuation of a prior such occurrence.
10. Notice of Termination. Any purported notice of
termination by the Company or the Employee of the Employee's
employment shall be communicated in a writing delivered to
the other party as provided in Paragraph 18 hereof
(hereinafter a "Notice of Termination"). Any such Notice of
Termination that purports to terminate Employee's employment
for Cause or for Good Reason shall specify the termination
provision relied upon by the party giving such notice and
shall set forth in detail such facts and circumstances
claimed to provide a justified basis for termination under
the provision(s) so indicated.
11. Trade Secrets, Etc. Upon the termination of his
employment, the Employee agrees forthwith to deliver up to
the Company, and, during the term of this Agreement and for
15 years thereafter, not to disclose to any person, firm,
corporation, association or other entity other than the
Company (a "Third Person") for any reason or purpose
whatsoever other than as authorized by the Company or as
required by law or as necessary to the performance of his
duties to the Company, any confidential data in his
possession, whether produced by the Company or by him,
relating to the Company's business or any past, current or
prospective activity of the Company.
12. Customer List. The Employee recognizes and
acknowledges that any written list(s) of the customers,
suppliers and/or vendors of the Company, its subsidiaries
and affiliates, is a valuable, special and unique asset.
The Employee agrees that he will not during the term of this
Agreement or within 15 years thereafter, use for his own
personal benefit or disclose any such written list or any
part thereof, to any Third Person for any reason or purpose
whatsoever.
13. [Omitted]
14. Injunctive Relief. In the event of a breach or
threatened breach by the Employee of the provisions of
Paragraph 11 or 12 of this Agreement during or after the
term of this Agreement, the Company shall be entitled to an
injunction restraining the Employee from violation of such
paragraph. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedy it may have in
the event of breach of this Agreement by the Employee.
15. Certain Proprietary Rights. The Employee agrees to
and hereby does assign to the Company all his right, title
and interest in and to all inventions, business plans, work
models or procedures, whether or not patentable, which are
made or conceived solely or jointly by him:
a. At any time during the term of his employment
by the Company and during the course of or in connection
with his duties during the term of this Agreement, or
b. With the use of time or materials of the
Company. The Employee agrees to communicate to the Company
or its representatives all facts known to him concerning
such matters, to sign all rightful papers, make all rightful
oaths and generally, at the Company's expense to do
everything reasonably practicable (without expense to the
Employee) to aid the Company in obtaining and enforcing
proper legal protection for all such matters in all
countries and in vesting title to such matters in the
Company. At the Company's request (during or after the term
of this Agreement) and expense, the Employee will promptly
execute a specific assignment of title to the Company, and
perform any other acts reasonably necessary to implement the
foregoing assignment.
16. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of:
a. The Company, and any successors or assigns of
the Company, whether by way of a merger or consolidation, or
by way of the Company selling all or substantially all of
the assets of the Company, to a successor entity, or other-
wise; however, in the event of the assignment by the Company
of this Agreement, the Company shall nevertheless remain
liable and obligated to the Employee in accordance with the
terms hereof; and
b. The Employee, his estate, his executors,
administrators, heirs and beneficiaries, none of whom shall
be permitted to assign this Agreement or any rights or
obligations hereunder.
17. Expenses Relating to Enforcement of Rights. The
Company agrees to pay as incurred, to the full extent
permitted by law, all reasonable time-based legal fees and
expenses which the Employee may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the
Company, the Employee or others of the validity or
enforceability of, or liability under, any provision hereof
(including as a result of any contest by the Employee about
the amount of any payment pursuant to this Agreement),
provided that if it is determined by a court that the
position of Employee in any such contest is unreasonable or
frivolous, he shall be required to reimburse the Company for
his legal fees and expenses so paid by the Company.
18. Notices. Any notice or other communication
required under this Agreement shall be in writing, shall be
deemed to have been given and received when delivered in
person, or, if mailed, shall be deemed to have been given
when deposited in the United States mail, first class,
registered or certified, return receipt requested, with
proper postage prepaid, and shall be deemed to have been
received on the third business day thereafter, and shall be
addressed as follows:
If to the Company, addressed to:
Chief Executive Officer
Campo Electronics, Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor
Covington, LA 70433
with a copy to:
Barbara Treuting Casteix, Esq.
Barrios Kingsdorf & Casteix
701 Poydras Street, Suite 3650
New Orleans, LA 70139
If to the Employee, addressed to:
2203 Firewood Drive
Baton Rouge, LA 70816
or such other address as to which any party hereto may have
notified the other in writing.
19. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of
Louisiana.
20. Entire Agreement. This Agreement, including
Appendices A through E, inclusive, all of which are herein
incorporated by reference and made a part hereof, and the
documents referred to herein, contain the entire understand-
ing between the Employee and the Company relating to the
employment of the Employee by the Company during the term of
this Agreement. No provision of this Agreement, including
the Appendices, may be modified or amended except by an
instrument in writing signed by both parties.
21. Severability. If any term or provision of this
Agreement, or the application thereof to any person or
circumstance, shall at any time or to any extent be invalid
or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and
enforced to the fullest extent permitted by law.
22. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach
thereof.
23. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all
other rights and remedies provided to them by applicable
law, rule or regulation.
24. Beneficiaries. Whenever this Agreement provides
for any payment to be made to the Employee's estate, such
payment may be made instead to such beneficiary or
beneficiaries as the Employee may have designated in writing
and filed with the Company. The Employee shall have the
right to revoke any such designation from time to time and
to redesignate any beneficiary or beneficiaries by written
notice to the Company.
25. No Obligation to Mitigate Damages. The Employee
shall not be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking
other employment or otherwise, nor shall the amount of any
payment provided for under this Agreement be reduced by any
compensation earned by the Employee as a result of
employment by another employer or by retirement or by other
benefits, either before the date of this Agreement or after
the date of termination of his employment with the Company
under this Agreement.
26. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute
one and the same instrument.
27. Bankruptcy Matters. The Company shall take all
necessary steps reasonably available to it so that amounts
payable hereunder shall not be subject to avoidance if the
Company comes under the protection of the federal bankruptcy
laws.
28. Continuation. Employee's employment under the
terms of this Agreement shall not be automatically continued
beyond the termination of this Agreement even if Employee's
employment by the Company continues thereafter. Any
continuation of this Agreement shall only be by express
written agreement of Employee and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ REX O. CORLEY, JR.
/s/ WAYNE J. USIE
Wayne J. Usie
APPENDIX A
SALARY AND BONUSES
A. Salary. The annualized salary rate of Employee
during the first year of the term of the Agreement shall be
$150,000 and shall be $157,500 during the second year (the
"Base Salary").
B. Stay Bonus. The Company shall pay to the Employee
a one-time bonus of $150,000 (the "Stay Bonus"), in a lump
sum payment made within fifteen days after the Completion
Date, provided that the Employee is in the Company's full
time employ on the Completion Date. "Completion Date" means
the earliest of the following dates: (i) the date on which a
plan of reorganization for the Company is confirmed, whether
by a court in a reorganization proceeding or by private
agreement with all or substantially all of the Company's
material creditors (a "Reorganization Plan"); (ii) the date
on which there occurs a "Change of Control" (as such term is
defined in the Company's Severance Pay Plan); (iii) the date
on which there is entered an order adjudging the Company a
bankrupt under Chapter 7 of the federal Bankruptcy Code and
such order is either a final, nonappealable order or is
entered at the Company's request or with its consent; or
(iv) the second anniversary of the date of this Agreement.
Employee shall be entitled to receive, at the same time as
and in addition to the Stay Bonus, all interest paid on the
certificate of deposit described in paragraph E below.
C. Performance Bonus. The Company shall pay to the
Employee, upon execution of this Agreement, a one-time
performance bonus of $25,000 in consideration of services
previously performed by Employee for the Company.
D. Incentive Compensation. The Company's Board of
Directors shall use its reasonable best efforts to develop,
as soon as is practicable, and in no event later than 120
days after the date of the Agreement, an executive incentive
compensation program in which Employee shall be eligible to
participate. The program shall be developed after
consultation with an executive compensation consultant, and
Employee's rewards under such program shall be based on
goals designed to return the Company to a profitable
position during the term of this Agreement or the Employee's
continued employment with the Company following such term.
E. Security for Stay Bonus. To secure payment of the
Stay Bonus, the Company will, within five business days
after the date of this Agreement, grant the Employee a
perfected security interest in an interest-bearing
certificate of deposit (or similar arrangement) issued by an
institution reasonably acceptable to the Employee, in the
principal amount of the Stay Bonus.
APPENDIX B
OTHER BENEFITS
During the term of the Agreement:
A. Vacation. The Employee shall be entitled to three
weeks of noncumulative paid vacation time per year of
employment.
B. Medical Benefits. The Employee shall be entitled
to participate in the medical benefit plans provided by the
Company from time to time to its executive officers
generally.
C. Other Benefits. The Employee shall be eligible to
participate in any other benefit program provided by the
Company from time to time to its executive officers
generally.
APPENDIX C
DEATH OR DISABILITY
In the event of a termination of the Employee's
employment during the term of the Agreement for the
Employee's death or Disability, the Employee shall be
entitled to payment within not less than 30 days from the
date of termination of (a) his salary through the date of
termination to the extent not already paid, (b) if such
termination occurs prior to the Completion Date, that
proportion of the Stay Bonus (but not to exceed 100%
thereof) as is equal to the number of days from the date of
this Agreement until the date the Employee's employment
terminated, divided by the number of days from the date of
this Agreement through the Completion Date, if such Date is
then ascertainable by the Board of Directors with reasonable
certainty, or 365 if such Date is not so ascertainable, and
(c) his Performance Bonus, to the extent not already paid.
APPENDIX D
SEVERANCE
Severance pay and benefits to be provided to the
Employee if the Employee is terminated during the term of
the Agreement by the Company without Cause or the Employee
terminates his employment during the term of the Agreement
for Good Reason are as follows: (a) the Company shall pay to
the Employee the amounts that would be due (at the times
they would be due) had employment terminated by reason of
death or Disability and, in addition, an amount (payable
within 30 days after termination of employment) equal to the
additional salary and benefits Employee would have received
had his employment terminated at (i) the first anniversary
of the Agreement, or (ii) six months after its actual
termination, whichever amount is greater, less any portion
thereof that has previously been paid and less any severance
benefits that are payable to Employee under the Company's
Severance Pay Plan with respect to any "change of control"
that occurs prior to the termination of Employee's
employment; and (b) for a period ending on the earlier of
(i) 6 months from the date of termination of Employee's
employment or (ii) Employee's obtaining other full-time
permanent employment, the Company shall, at its sole expense
as incurred, provide the Employee with outplacement services
that are reasonable in scope and cost in relation to his
position. The following is an example of clause (a): if
employment terminates prior to the end of the first six
months of the term of this Agreement and Employee is
entitled to severance, clause (a)(i) would apply. If it
terminates at any time after the end of the first six months
of the term of this Agreement and Employee is entitled to
severance, clause (a)(ii) would apply.
APPENDIX E
TERMINATION
If the employment of Employee is terminated at any time
during the term of the Agreement (i) by Employee without
Good Reason, or (ii) by the Company for Cause, the Company
shall be obligated to Employee only for payment within not
less than 30 days from the date of termination of his salary
through the date of termination, to the extent not
previously paid.
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is
entered into this 24th day of June, 1997 by and between Campo
Electronics, Appliances and Computers, Inc.(the "Company") and
Wayne J. Usie (the "Employee").
WITNESSETH:
WHEREAS, the Employee is presently employed by the Company
in the capacity of Vice President - Information Systems, Chief
Financial Officer and Secretary, said employment being pursuant
to an Employment Agreement dated March 21, 1997 (the
"Agreement"); and
WHEREAS, the Compensation Committee of the Board of
Directors of the Company (the "Committee") recognizes that the
Employee's contribution to the Company, in terms of both the
complexity of the Company's business that Employee has been asked
to handle and the enormous amount of time and attention devoted
by Employee after normal business hours to the Company's
business, has been substantially in excess of what was
anticipated at the time that the Agreement was executed; and
WHEREAS, the Committee desires to provide for the continued
employment of the Employee and to make certain modifications to
the Agreement, and the Employee desires to continue to serve the
Company upon the terms and conditions of the Agreement as herein
amended.
NOW, THEREFORE, in consideration of the premises and of the
respective representations and warranties and the mutual
covenants set forth in the Agreement, the parties hereto hereby
agree to amend the Agreement as follows:
1. Paragraph 2 of the Agreement is amended to require the
Employee to devote such time and attention after normal business
hours to the Company's business as is reasonably necessary and,
accordingly, Paragraph 2 of the Agreement is hereby revised to
read as follows:
2. Time and Effort/Absences. During the term
of this Agreement, the Employee shall devote
his entire time and attention during normal
business hours, and thereafter as reasonably
necessary, to the Company's business, and he
shall not engage in any other business
activity whether or not for gain, profit or
other pecuniary advantage, but nothing shall
be construed to restrict him (i) from
performing services as a member of the Board
of Directors, Board of Trustees or the like
of any non-profit or for-profit entity
whether or not he receives compensation
therefor, provided that such services do not
unreasonably interfere with his ability to
perform the services and discharge his
responsibilities hereunder, (ii) from
investing his assets in such form or manner
as will not require any services on his part
in the operation of the business of the
entity in which such investment is made,
and/or (iii) from serving in various
capacities with, and attending meetings of,
industry groups and associations relevant to
the Company's business.
2. The severance pay and benefits described in Appendix D
of the Agreement are revised to provide that the additional
salary and benefits that the Employee would have received had
his employment not terminated are payable at the times they would
otherwise be due rather than in a lump sum payment, and are
expanded to include the payment of the Stay Bonus in a lump sum
payment payable within 30 days after termination of employment.
Accordingly, the existing language of Appendix D to the Agreement
is deleted in its entirety and the following language is
substituted therefor:
APPENDIX D
SEVERANCE
Severance pay and benefits to be
provided to the Employee if the Employee is
terminated during the term of the Agreement
by the Company without Cause or the Employee
terminates his employment during the term of
the Agreement for Good Reason are as follows:
(a) the Company shall pay to the Employee
(payable within 15 days after termination of
employment) his salary and benefits through
the date of termination, to the extent not
already paid; (b) the Company shall pay to
the Employee the additional salary and
benefits that the Employee would have
received (at the times they would have been
paid) had his employment terminated at (i)
the first anniversary of the Agreement, or
(ii) six months after its actual termination,
whichever amount is greater, less any portion
thereof that has previously been paid and
less any severance benefits that are payable
to Employee under the Company's Severance Pay
Plan with respect to any "change of control"
that occurs prior to the termination of
Employee's employment; (c) the Company shall
pay the Stay Bonus to the Employee (payable
within 30 days after termination of
employment); and (d) for a period ending on
the earlier of (i) six months from the date
of termination of Employee's employment or
(ii) Employee's obtaining other full-time
permanent employment, the Company shall, at
its sole expense as incurred, provide the
Employee with outplacement services that are
reasonable in scope and cost in relation to
his position. The following is an example of
clause (b): if employment terminates prior to
the first six months of the term of this
Agreement and Employee is entitled to
severance, clause (b)(i) would apply. If it
terminates at any time after the end of the
first six months of the term of this
Agreement and Employee is entitled to
severance, clause (b)(ii) would apply.
3. Except as specifically amended herein, all other terms
and conditions of the Agreement shall remain unchanged and in
full force and effect, and the Agreement, as amended herein shall
constitute the entire understanding and agreement among the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
CAMPO ELECTRONICS, APPLIANCES AND
COMPUTERS, INC.
By: /s/ L. RONALD FORMAN
Name: L. Ronald Forman
Title: Chairman, Management
Committee & Member,
Compensation Committee
EMPLOYEE:
/s/ WAYNE J. USIE
WAYNE J. USIE
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Agreement is dated as of the 14th day of April, 1997,
between Campo Electronics, Appliances and Computers, Inc. (the
"Company") and John K. Ross (the "Employee").
1. Employment/Capacity. The Company agrees to and does
hereby employ the Employee, and the Employee agrees to and does
hereby remain in the employ of the Company, upon the terms and
conditions set forth in this Agreement. Such employment shall be
in the capacity of Vice President - Marketing, subject to the
supervision of the Company's Board of Directors and Chief
Executive Officer. Such employment shall commence on the date of
this Agreement (the "Effective Date") and shall continue until
the first anniversary of the date of this Agreement unless sooner
terminated as provided in this Agreement. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to
include the period subsequent to the Effective Date through the
earlier of termination of Employee's employment with the Company
or the first anniversary of the date of this Agreement; however,
such phrase shall not be construed as limiting the enforceability
by either party of any rights provided for in this Agreement.
2. Time and Effort/Absences. During the term of this
Agreement, the Employee shall devote his entire time and
attention during normal business hours to the Company's business,
and he shall not engage in any other business activity whether or
not for gain, profit or other pecuniary advantage, but nothing
shall be construed to restrict him (i) from performing services
as a member of the Board of Directors, Board of Trustees or the
like of any non-profit or for-profit entity whether or not he
receives compensation therefor, provided that such services do
not unreasonably interfere with his ability to perform the
services and discharge his responsibilities hereunder, (ii) from
investing his assets in such form or manner as will not require
any services on his part in the operation of the business of the
entity in which such investment is made, and/or (iii) from
serving in various capacities with, and attending meetings of,
industry groups and associations relevant to the Company's
business.
3. Corporate Offices. If elected, the Employee will
serve, without additional compensation, as a director of the
Company and/or as an officer and director (or in either capacity)
of any subsidiary of the Company. The Company agrees during
Employee's employment hereunder to:
(i) maintain, if available at a cost acceptable to the
Board of Directors in its discretion, director and officer
liability insurance for the Employee in connection with his
serving in all such capacities in an amount and on such
terms as are currently in effect for officers and directors
of the Company or, if reduced, as are reasonably
satisfactory to the Employee; and
(ii) use its reasonable best efforts to maintain the
director and officer exculpation and indemnification
provisions currently provided in its Articles of
Incorporation and By-laws and, if Louisiana law at any time
permits more protection than currently provided, use its
best efforts to add such additional protection.
4. Salary/Bonus/Other Benefits. In consideration of the
services and duties to be rendered and performed by the Employee
during the term of this Agreement, the Company agrees that it
will, during the term of this Agreement, pay and provide for the
Employee the compensation and benefits described below and
described elsewhere in this Agreement and the Appendices hereto:
a. Salary. A salary, payable in equal bi-weekly
installments, at the annualized rate provided in Appendix A
hereto, or in such greater amount as may from time to time be
fixed by the Board of Directors of the Company or any duly
authorized committee thereof. The Employee's salary rate shall
not be reduced without his written consent.
b. Bonus. A bonus or bonuses in such amount as
described and as may from time to time be fixed in accordance
with Appendix A hereto.
c. Other Benefits. The other payments and/or
benefits described in Appendix B hereto.
d. Withholding. All such payments shall be net of
applicable withholding for taxes and other required amounts
("Withholding").
5. Expenses. The Employee shall be reimbursed for out-of-
pocket expenses incurred from time to time on behalf of the
Company or any subsidiary in the performance of his duties under
this Agreement, upon the presentation of such supporting
documents and forms as the Company shall reasonably request.
6. Disability. If the Employee becomes Disabled (such term
is used as defined in Section 1.5 of the Company's Severance Pay
Plan and Summary Plan Description) during the term of this
Agreement the Company shall have the continuing right and option
while such disability continues by notice in writing to the
Employee to terminate this Agreement effective thirty days after
such notice is so given, unless within such thirty day period he
becomes capable of rendering full time services of the character
contemplated hereby and he resumes such services. If the
Employee becomes Disabled, as aforesaid, the Company shall be
obligated to provide to him the amounts and benefits described in
Appendix C hereto (less Withholding) in lieu of all other amounts
and benefits provided by this Agreement.
7. Death. If Employee dies during the term of this
Agreement, this Agreement will terminate and the Company shall be
obligated to provide his personal representative(s) and/or his
beneficiaries with the amounts and death benefits described in
Appendix C hereto (less Withholding) in lieu of all other amounts
and benefits provided by this Agreement.
8. Severance or Termination Pay and Benefits. If the
employment of the Employee is terminated at any time during the
term of this Agreement (i) by him for Good Reason (as defined in
Paragraph 9 hereof) or (ii) by the Company for any reason other
than for Cause (as hereafter defined), the Company shall be
obligated to pay to him the severance pay and benefits described
in Appendix D hereto (less Withholding) in lieu of all other
amounts and benefits provided by this Agreement. If the
employment of Employee is terminated at any time during the term
of this Agreement (i) by him without Good Reason or (ii) by the
Company for Cause, the Company shall be obligated to pay the
Employee the termination and other benefits described in Appendix
E hereto (less Withholding) in lieu of all other amounts and
benefits provided by this Agreement. Termination of the
Employee's employment on account of his Disability or death will
not require the Company to pay and provide any amounts and
benefits pursuant to Appendix D or E, but instead to pay and
provide the amounts and benefits described in Appendix C.
As used herein, the term "Cause" means (i) the willful and
continuing failure by the Employee to perform substantially the
services contemplated (other than any such failure resulting from
his Disability) within a reasonable period of time after a
written demand for substantial performance is delivered to him by
a duly authorized member or representative of the Company's Board
of Directors which specifically identifies the manner in which
it is alleged that he has not substantially performed such
services, or (ii) the willful engaging by him in misconduct
materially injurious to the Company.
9. Termination by the Employee for Good Reason.
a. The termination by the Employee of his employment
for "Good Reason" during the term of this Agreement shall be
deemed a justifiable termination of his employment and shall
excuse him from the obligation to render services under or
relating to this Agreement. In that event the Company shall be
obligated to pay to the Employee the amounts and benefits
described in Appendix D hereto in lieu of all others provided by
this Agreement. As used herein, the term "Good Reason" means:
1. the occurrence of any of the following: (i)
a change by the Company in his status, title or position(s) as an
officer of the Company which does not represent a promotion from
or enhancement of his status, title and position, or (ii) the
assignment of any duties, responsibilities which are inconsistent
with such status, title or position, or (iii) any removal of the
Employee from or any failure to reappoint or reelect him to his
position except in connection with a justifiable termination by
the Company of his employment for Cause or on account of
Disability or death or the termination by the Employee of his
employment other than for Good Reason, or (iv) the exclusion from
meetings, or decision-making processes, or the withholding of
data which would be valuable and appropriate to an executive
officer of the Company, or germane to the function of Vice
President of Marketing, provided in each such case described in
clauses (i), (ii), (iii) or (iv) that the same continues for 10
days after written notice thereof by the Employee to the Company
specifying the alleged occurrence; or
2. a reduction in his salary rate or a failure
by the Company to pay to the Employee when due any installment of
salary and/or any bonus required pursuant to Appendix A or to pay
when due any other amounts owing under or relating to this
Agreement, or to perform any of the Company's material
obligations under this Agreement, which reduction or failure in
any such case continues for a period of ten days after written
notice thereof is given by him to the Company; or
3. the Company's requiring him to be based
anywhere other than within a 75-mile radius of the New Orleans,
Louisiana area except for required travel in the ordinary course
of the Company's business.
b. The filing by or against the Company of an application
seeking protection under the federal bankruptcy laws, or the
granting of such application, shall not of itself constitute Good
Reason, but the failure of the Company to satisfy Paragraph 27
shall constitute Good Reason.
c. Employee's right to terminate his employment for Good
Reason during the term of this Agreement shall continue in effect
until the Company notifies Employee in writing that Good Reason
exists specifying the provision of the Agreement giving rise to
the right to terminate and Employee fails to exercise such right
within 60 days of actual receipt of such notice. Any such
failure to exercise shall not prevent Employee from exercising
the right to terminate for Good Reason with respect to any new
occurrence constituting Good Reason that follows such failure and
is not a continuation of a prior such occurrence.
10. Notice of Termination. Any purported notice of
termination by the Company or the Employee of the Employee's
employment shall be communicated in a writing delivered to the
other party as provided in Paragraph 18 hereof (hereinafter a
"Notice of Termination"). Any such Notice of Termination that
purports to terminate Employee's employment for Cause or for Good
Reason shall specify the termination provision relied upon by the
party giving such notice and shall set forth in detail such facts
and circumstances claimed to provide a justified basis for
termination under the provision(s) so indicated.
11. Trade Secrets, Etc. Upon the termination of his
employment, the Employee agrees forthwith to deliver up to the
Company, and, during the term of this Agreement and for 15 years
thereafter, not to disclose to any person, firm, corporation,
association or other entity other than the Company (a "Third
Person") for any reason or purpose whatsoever other than as
authorized by the Company or as required by law or as necessary
to the performance of his duties to the Company, any confidential
data in his possession, whether produced by the Company or by
him, relating to the Company's business or any past, current or
prospective activity of the Company.
12. Customer List. The Employee recognizes and
acknowledges that any written list(s) of the customers, suppliers
and/or vendors of the Company, its subsidiaries and affiliates,
is a valuable, special and unique asset. The Employee agrees
that he will not during the term of this Agreement or within 15
years thereafter, use for his own personal benefit or disclose
any such written list or any part thereof, to any Third Person
for any reason or purpose whatsoever.
13. [Omitted]
14. Injunctive Relief. In the event of a breach or threat-
ened breach by the Employee of the provisions of Paragraph 11 or
12 of this Agreement during or after the term of this Agreement,
the Company shall be entitled to an injunction restraining the
Employee from violation of such paragraph. Nothing herein shall
be construed as prohibiting the Company from pursuing any other
remedy it may have in the event of breach of this Agreement by
the Employee.
15. Certain Proprietary Rights. The Employee agrees to and
hereby does assign to the Company all his right, title and
interest in and to all inventions, business plans, work models or
procedures, whether or not patentable, which are made or
conceived solely or jointly by him:
a. At any time during the term of his employment by
the Company and during the course of or in connection with his
duties during the term of this Agreement, or
b. With the use of time or materials of the Company.
The Employee agrees to communicate to the Company or its
representatives all facts known to him concerning such matters,
to sign all rightful papers, make all rightful oaths and
generally, at the Company's expense to do everything reasonably
practicable (without expense to the Employee) to aid the Company
in obtaining and enforcing proper legal protection for all such
matters in all countries and in vesting title to such matters in
the Company. At the Company's request (during or after the term
of this Agreement) and expense, the Employee will promptly
execute a specific assignment of title to the Company, and
perform any other acts reasonably necessary to implement the
foregoing assignment.
16. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of:
a. The Company, and any successors or assigns of the
Company, whether by way of a merger or consolidation, or by way
of the Company selling all or substantially all of the assets of
the Company, to a successor entity, or otherwise; however, in the
event of the assignment by the Company of this Agreement, the
Company shall nevertheless remain liable and obligated to the
Employee in accordance with the terms hereof; and
b. The Employee, his estate, his executors,
administrators, heirs and beneficiaries, none of whom shall be
permitted to assign this Agreement or any rights or obligations
hereunder.
17. Expenses Relating to Enforcement of Rights. The
Company agrees to pay as incurred, to the full extent permitted
by law, all reasonable time-based legal fees and expenses which
the Employee may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Employee
or others of the validity or enforceability of, or liability
under, any provision hereof (including as a result of any contest
by the Employee about the amount of any payment pursuant to this
Agreement), provided that if it is determined by a court that the
position of Employee in any such contest is unreasonable or
frivolous, he shall be required to reimburse the Company for his
legal fees and expenses so paid by the Company.
18. Notices. Any notice or other communication required
under this Agreement shall be in writing, shall be deemed to have
been given and received when delivered in person, or, if mailed,
shall be deemed to have been given when deposited in the United
States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and
shall be addressed as follows:
If to the Company, addressed to:
Chief Executive Officer
Campo Electronics, Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor
Covington, LA 70433
with a copy to:
Barbara Treuting Casteix, Esq.
Barrios Kingsdorf & Casteix, L.L.P.
701 Poydras Street, Suite 3650
New Orleans, LA 70139
If to the Employee, addressed to:
217 Paradise Court
Mandeville, LA 70448
or such other address as to which any party hereto may have
notified the other in writing.
19. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Louisiana.
20. Entire Agreement. This Agreement, including Appendices
A through E, inclusive, all of which are herein incorporated by
reference and made a part hereof, and the documents referred to
herein, contain the entire understanding between the Employee and
the Company relating to the employment of the Employee by the
Company during the term of this Agreement. No provision of this
Agreement, including the Appendices, may be modified or amended
except by an instrument in writing signed by both parties.
21. Severability. If any term or provision of this Agree-
ment, or the application thereof to any person or circumstance,
shall at any time or to any extent be invalid or unenforceable,
the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Agreement shall be
valid and enforced to the fullest extent permitted by law.
22. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
23. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all other
rights and remedies provided to them by applicable law, rule or
regulation.
24. Beneficiaries. Whenever this Agreement provides for
any payment to be made to the Employee's estate, such payment may
be made instead to such beneficiary or beneficiaries as the
Employee may have designated in writing and filed with the
Company. The Employee shall have the right to revoke any such
designation from time to time and to redesignate any beneficiary
or beneficiaries by written notice to the Company.
25. No Obligation to Mitigate Damages. The Employee shall
not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the
Employee as a result of employment by another employer or by
retirement or by other benefits, either before the date of this
Agreement or after the date of termination of his employment with
the Company under this Agreement.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
27. Bankruptcy Matters. The Company shall take all
necessary steps reasonably available to it so that amounts
payable hereunder shall not be subject to avoidance if the
Company comes under the protection of the federal bankruptcy
laws.
28. Continuation. Employee's employment under the terms of
this Agreement shall not be automatically continued beyond the
termination of this Agreement even if Employee's employment by
the Company continues thereafter. Any continuation of this
Agreement shall only be by express written agreement of Employee
and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ REX O. CORLEY, JR.
/s/ JOHN K. ROSS
John K. Ross
APPENDIX A
SALARY AND BONUSES
A. Salary. The annualized salary rate of Employee during
the term of the Agreement shall be $125,000 (the "Base Salary").
B. Performance Bonus. The Company shall pay to the
Employee, upon execution of this Agreement, a one-time
performance bonus of $25,000 in consideration of services
previously performed by Employee for the Company.
C. Incentive Bonus. The Company shall pay to the Employee
a bonus of up to $25,000.00 (the "Incentive Bonus") in a lump sum
payment made within 15 days after the first anniversary of the
date of this Agreement, the amount of which bonus shall be based
upon the Company having achieved the following name and market
share criteria (the "Bonus Criteria") as confirmed by unaided
recall independent market research in not less than 50% of the
markets (the "Sample Markets") in which Campo has conducted
business for a period of not less than 12 consecutive months:
(i) consumers continue to identify
Campo as the Number One or Number
Two retailer in appliances, home
electronics and home office
products in such Sample Markets;
and
(ii) consumers continue to identify
Campo as the Number One or Number
Two retailer "shopped-first" for
appliances, home electronics and
home office products in such Sample
Markets.
For purposes of establishing the Bonus Criteria, "independent
market research" may be determined by any of the following
methods: (a) research contracted for by the Company itself, or in
partnership with local newspapers in the Sample Markets, or (b)
through commercial market reports, if available in the Sample
Markets. The Sample Markets shall be selected by the Board of
Directors. To the extent that the Company chooses not to obtain
independent market research for all of the Sample Markets
selected and no other independent market research is available to
determine whether the Bonus Criteria has been satisfied in the
requisite percentage of Sample Markets (50%), the requisite
percentage shall be reduced to 50% of the Sample Markets for
which independent market research has been obtained or otherwise
exists. In the event that the only one of the two Bonus Criteria
has been satisfied, the amount of the Incentive Bonus to be paid
to the Employee shall be $12,500.00. If neither criteria is
satisfied, no bonus will be due to the Employee.
D. Incentive Compensation. The Company's Board of
Directors shall use its reasonable best efforts to develop, as
soon as is practicable, and in no event later than 120 days after
the date of the Agreement, an executive incentive compensation
program in which Employee shall be eligible to participate. The
program shall be developed after consultation with an executive
compensation consultant, and Employee's rewards under such
program shall be based on goals designed to return the Company to
a profitable position during the term of this Agreement or the
Employee's continued employment with the Company following such
term.
E. Accelerated Vesting of Stock Option. Within ten
business days after the date of this Agreement, the Company and
Employee will enter into an agreement amending the Non-Qualified
Stock Option Agreement (the "Option Agreement") entered into as
of October 4, 1996 by and between the Company and the Employee to
eliminate the vesting criteria set forth in Section 2 of the
Option Agreement and to provide that 100% of the Option to
purchase 50,000 shares of the Company's common stock at the
Exercise Price shall be exercisable by Employee six months from
the date of this Agreement.
APPENDIX B
OTHER BENEFITS
During the term of the Agreement:
A. Vacation. The Employee shall be entitled to three
weeks of noncumulative paid vacation time per year of employment.
B. Medical Benefits. The Employee shall be entitled to
participate in the medical benefit plans provided by the Company
from time to time to its executive officers generally.
C. Other Benefits. The Employee shall be eligible to
participate in any other benefit program provided by the Company
from time to time to its executive officers generally.
APPENDIX C
DEATH OR DISABILITY
In the event of a termination of the Employee's employment
during the term of the Agreement for the Employee's death or
Disability, the Employee shall be entitled to payment within not
less than 30 days from the date of termination of (a) his salary
through the date of termination to the extent not already paid,
and (b) his Performance Bonus, to the extent not already paid.
APPENDIX D
SEVERANCE
Severance pay and benefits to be provided to the Employee if
the Employee is terminated during the term of the Agreement by
the Company without Cause or the Employee terminates his
employment during the term of the Agreement for Good Reason are
as follows: (a) the Company shall pay to the Employee the amounts
that would be due (at the times they would be due) had employment
terminated by reason of death or Disability and, in addition, an
amount (payable within 30 days after termination of employment)
equal to the additional salary and benefits Employee would have
received had his employment terminated six months after its
actual termination, less any portion thereof that has previously
been paid and less any severance benefits that are payable to
Employee under the Company's Severance Pay Plan with respect to
any "change of control" that occurs prior to the termination of
Employee's employment; and (b) for a period ending on the earlier
of (i) 6 months from the date of termination of Employee's
employment or (ii) Employee's obtaining other full-time permanent
employment, the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services that are
reasonable in scope and cost in relation to his position.
APPENDIX E
TERMINATION
If the employment of Employee is terminated at any time
during the term of the Agreement (i) by Employee without Good
Reason, or (ii) by the Company for Cause, the Company shall be
obligated to Employee only for payment within not less than 30
days from the date of termination of his salary through the date
of termination, to the extent not previously paid.
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Agreement is dated as of the 23rd day of April, 1997,
between Campo Electronics, Appliances and Computers, Inc. (the
"Company") and James B. Warren (the "Employee").
1. Employment/Capacity. The Company agrees to and does
hereby employ the Employee, and the Employee agrees to and does
hereby remain in the employ of the Company, upon the terms and
conditions set forth in this Agreement. Such employment shall be
in the capacity of Vice President - Merchandising, subject to the
supervision of the Company's Board of Directors and Chief
Executive Officer. Such employment shall commence on the date of
this Agreement (the "Effective Date") and shall continue until
the first anniversary of the date of this Agreement unless sooner
terminated as provided in this Agreement. As used in this
Agreement, the phrase "term of this Agreement" shall be deemed to
include the period subsequent to the Effective Date through the
earlier of termination of Employee's employment with the Company
or the first anniversary of the date of this Agreement; however,
such phrase shall not be construed as limiting the enforceability
by either party of any rights provided for in this Agreement.
2. Time and Effort/Absences. During the term of this
Agreement, the Employee shall devote his entire time and
attention during normal business hours to the Company's business,
and he shall not engage in any other business activity whether or
not for gain, profit or other pecuniary advantage, but nothing
shall be construed to restrict him (i) from performing services
as a member of the Board of Directors, Board of Trustees or the
like of any non-profit or for-profit entity whether or not he
receives compensation therefor, provided that such services do
not unreasonably interfere with his ability to perform the
services and discharge his responsibilities hereunder, (ii) from
investing his assets in such form or manner as will not require
any services on his part in the operation of the business of the
entity in which such investment is made, and/or (iii) from
serving in various capacities with, and attending meetings of,
industry groups and associations relevant to the Company's
business.
3. Corporate Offices. If elected, the Employee will
serve, without additional compensation, as a director of the
Company and/or as an officer and director (or in either capacity)
of any subsidiary of the Company. The Company agrees during
Employee's employment hereunder to:
(i) maintain, if available at a cost acceptable to the
Board of Directors in its discretion, director and officer
liability insurance for the Employee in connection with his
serving in all such capacities in an amount and on such
terms as are currently in effect for officers and directors
of the Company or, if reduced, as are reasonably
satisfactory to the Employee; and
(ii) use its reasonable best efforts to maintain the
director and officer exculpation and indemnification
provisions currently provided in its Articles of
Incorporation and By-laws and, if Louisiana law at any time
permits more protection than currently provided, use its
best efforts to add such additional protection.
4. Salary/Bonus/Other Benefits. In consideration of the
services and duties to be rendered and performed by the Employee
during the term of this Agreement, the Company agrees that it
will, during the term of this Agreement, pay and provide for the
Employee the compensation and benefits described below and
described elsewhere in this Agreement and the Appendices hereto:
a. Salary. A salary, payable in equal bi-weekly
installments, at the annualized rate provided in Appendix A
hereto, or in such greater amount as may from time to time be
fixed by the Board of Directors of the Company or any duly
authorized committee thereof. The Employee's salary rate shall
not be reduced without his written consent.
b. Bonus. A bonus or bonuses in such amount as
described and as may from time to time be fixed in accordance
with Appendix A hereto.
c. Other Benefits. The other payments and/or
benefits described in Appendix B hereto.
d. Withholding. All such payments shall be net of
applicable withholding for taxes and other required amounts
("Withholding").
5. Expenses. The Employee shall be reimbursed for out-of-
pocket expenses incurred from time to time on behalf of the
Company or any subsidiary in the performance of his duties under
this Agreement, upon the presentation of such supporting
documents and forms as the Company shall reasonably request.
6. Disability. If the Employee becomes Disabled (such term
is used as defined in Section 1.5 of the Company's Severance Pay
Plan and Summary Plan Description) during the term of this
Agreement the Company shall have the continuing right and option
while such disability continues by notice in writing to the
Employee to terminate this Agreement effective thirty days after
such notice is so given, unless within such thirty day period he
becomes capable of rendering full time services of the character
contemplated hereby and he resumes such services. If the
Employee becomes Disabled, as aforesaid, the Company shall be
obligated to provide to him the amounts and benefits described in
Appendix C hereto (less Withholding) in lieu of all other amounts
and benefits provided by this Agreement.
7. Death. If Employee dies during the term of this
Agreement, this Agreement will terminate and the Company shall be
obligated to provide his personal representative(s) and/or his
beneficiaries with the amounts and death benefits described in
Appendix C hereto (less Withholding) in lieu of all other amounts
and benefits provided by this Agreement.
8. Severance or Termination Pay and Benefits. If the
employment of the Employee is terminated at any time during the
term of this Agreement (i) by him for Good Reason (as defined in
Paragraph 9 hereof) or (ii) by the Company for any reason other
than for Cause (as hereafter defined), the Company shall be
obligated to pay to him the severance pay and benefits described
in Appendix D hereto (less Withholding) in lieu of all other
amounts and benefits provided by this Agreement. If the
employment of Employee is terminated at any time during the term
of this Agreement (i) by him without Good Reason or (ii) by the
Company for Cause, the Company shall be obligated to pay the
Employee the termination and other benefits described in Appendix
E hereto (less Withholding) in lieu of all other amounts and
benefits provided by this Agreement. Termination of the
Employee's employment on account of his Disability or death will
not require the Company to pay and provide any amounts and
benefits pursuant to Appendix D or E, but instead to pay and
provide the amounts and benefits described in Appendix C.
As used herein, the term "Cause" means (i) the willful and
continuing failure by the Employee to perform substantially the
services contemplated (other than any such failure resulting from
his Disability) within a reasonable period of time after a
written demand for substantial performance is delivered to him by
a duly authorized member or representative of the Company's Board
of Directors which specifically identifies the manner in which
it is alleged that he has not substantially performed such
services, or (ii) the willful engaging by him in misconduct
materially injurious to the Company.
9. Termination by the Employee for Good Reason.
a. The termination by the Employee of his employment
for "Good Reason" during the term of this Agreement shall be
deemed a justifiable termination of his employment and shall
excuse him from the obligation to render services under or
relating to this Agreement. In that event the Company shall be
obligated to pay to the Employee the amounts and benefits
described in Appendix D hereto in lieu of all others provided by
this Agreement. As used herein, the term "Good Reason" means:
1. the occurrence of any of the following: (i)
a change by the Company in his status, title or position(s) as an
officer of the Company which does not represent a promotion from
or enhancement of his status, title and position, or (ii) the
assignment of any duties, responsibilities which are inconsistent
with such status, title or position, or (iii) any removal of the
Employee from or any failure to reappoint or reelect him to his
position except in connection with a justifiable termination by
the Company of his employment for Cause or on account of
Disability or death or the termination by the Employee of his
employment other than for Good Reason, or (iv) the exclusion from
meetings or decision-making processes, or the withholding of data
which would be valuable and appropriate to an executive officer
of the Company or germane to the function of Vice President of
Merchandising, provided in each such case described in clauses
(i), (ii), (iii) or (iv) that the same continues for 10 days
after written notice thereof by the Employee to the Company
specifying the alleged occurrence; or
2. a reduction in his salary rate or a failure
by the Company to pay to the Employee when due any installment of
salary and/or any bonus required pursuant to Appendix A or to pay
when due any other amounts owing under or relating to this
Agreement, or to perform any of the Company's material
obligations under this Agreement, which reduction or failure in
any such case continues for a period of ten days after written
notice thereof is given by him to the Company; or
3. the Company's requiring him to be based
anywhere other than within a 75-mile radius of the New Orleans,
Louisiana area except for required travel in the ordinary course
of the Company's business.
b. The filing by or against the Company of an application
seeking protection under the federal bankruptcy laws, or the
granting of such application, shall not of itself constitute Good
Reason, but the failure of the Company to satisfy Paragraph 27
shall constitute Good Reason.
c. Employee's right to terminate his employment for Good
Reason during the term of this Agreement shall continue in effect
until the Company notifies Employee in writing that Good Reason
exists specifying the provision of the Agreement giving rise to
the right to terminate and Employee fails to exercise such right
within 60 days of actual receipt of such notice. Any such
failure to exercise shall not prevent Employee from exercising
the right to terminate for Good Reason with respect to any new
occurrence constituting Good Reason that follows such failure and
is not a continuation of a prior such occurrence.
10. Notice of Termination. Any purported notice of
termination by the Company or the Employee of the Employee's
employment shall be communicated in a writing delivered to the
other party as provided in Paragraph 18 hereof (hereinafter a
"Notice of Termination"). Any such Notice of Termination that
purports to terminate Employee's employment for Cause or for Good
Reason shall specify the termination provision relied upon by the
party giving such notice and shall set forth in detail such facts
and circumstances claimed to provide a justified basis for
termination under the provision(s) so indicated.
11. Trade Secrets, Etc. Upon the termination of his
employment, the Employee agrees forthwith to deliver up to the
Company, and, during the term of this Agreement and for 15 years
thereafter, not to disclose to any person, firm, corporation,
association or other entity other than the Company (a "Third
Person") for any reason or purpose whatsoever other than as
authorized by the Company or as required by law or as necessary
to the performance of his duties to the Company, any confidential
data in his possession, whether produced by the Company or by
him, relating to the Company's business or any past, current or
prospective activity of the Company.
12. Customer List. The Employee recognizes and
acknowledges that any written list(s) of the customers, suppliers
and/or vendors of the Company, its subsidiaries and affiliates,
is a valuable, special and unique asset. The Employee agrees
that he will not during the term of this Agreement or within 15
years thereafter, use for his own personal benefit or disclose
any such written list or any part thereof, to any Third Person
for any reason or purpose whatsoever.
13. [Omitted]
14. Injunctive Relief. In the event of a breach or threat-
ened breach by the Employee of the provisions of Paragraph 11 or
12 of this Agreement during or after the term of this Agreement,
the Company shall be entitled to an injunction restraining the
Employee from violation of such paragraph. Nothing herein shall
be construed as prohibiting the Company from pursuing any other
remedy it may have in the event of breach of this Agreement by
the Employee.
15. Certain Proprietary Rights. The Employee agrees to and
hereby does assign to the Company all his right, title and
interest in and to all inventions, business plans, work models or
procedures, whether or not patentable, which are made or
conceived solely or jointly by him:
a. At any time during the term of his employment by
the Company and during the course of or in connection with his
duties during the term of this Agreement, or
b. With the use of time or materials of the Company.
The Employee agrees to communicate to the Company or its
representatives all facts known to him concerning such matters,
to sign all rightful papers, make all rightful oaths and
generally, at the Company's expense to do everything reasonably
practicable (without expense to the Employee) to aid the Company
in obtaining and enforcing proper legal protection for all such
matters in all countries and in vesting title to such matters in
the Company. At the Company's request (during or after the term
of this Agreement) and expense, the Employee will promptly
execute a specific assignment of title to the Company, and
perform any other acts reasonably necessary to implement the
foregoing assignment.
16. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of:
a. The Company, and any successors or assigns of the
Company, whether by way of a merger or consolidation, or by way
of the Company selling all or substantially all of the assets of
the Company, to a successor entity, or otherwise; however, in the
event of the assignment by the Company of this Agreement, the
Company shall nevertheless remain liable and obligated to the
Employee in accordance with the terms hereof; and
b. The Employee, his estate, his executors,
administrators, heirs and beneficiaries, none of whom shall be
permitted to assign this Agreement or any rights or obligations
hereunder.
17. Expenses Relating to Enforcement of Rights. The
Company agrees to pay as incurred, to the full extent permitted
by law, all reasonable time-based legal fees and expenses which
the Employee may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Employee
or others of the validity or enforceability of, or liability
under, any provision hereof (including as a result of any contest
by the Employee about the amount of any payment pursuant to this
Agreement), provided that if it is determined by a court that the
position of Employee in any such contest is unreasonable or
frivolous, he shall be required to reimburse the Company for his
legal fees and expenses so paid by the Company.
18. Notices. Any notice or other communication required
under this Agreement shall be in writing, shall be deemed to have
been given and received when delivered in person, or, if mailed,
shall be deemed to have been given when deposited in the United
States mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and
shall be addressed as follows:
If to the Company, addressed to:
Chief Executive Officer
Campo Electronics, Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor
Covington, LA 70433
with a copy to:
Barbara Treuting Casteix, Esq.
Barrios Kingsdorf & Casteix, L.L.P.
701 Poydras Street, Suite 3650
New Orleans, LA 70139
If to the Employee, addressed to:
4742 Folse Drive
Metairie, LA 70006
or such other address as to which any party hereto may have
notified the other in writing.
19. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Louisiana.
20. Entire Agreement. This Agreement, including Appendices
A through E, inclusive, all of which are herein incorporated by
reference and made a part hereof, and the documents referred to
herein, contain the entire understanding between the Employee and
the Company relating to the employment of the Employee by the
Company during the term of this Agreement. No provision of this
Agreement, including the Appendices, may be modified or amended
except by an instrument in writing signed by both parties.
21. Severability. If any term or provision of this Agree-
ment, or the application thereof to any person or circumstance,
shall at any time or to any extent be invalid or unenforceable,
the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Agreement shall be
valid and enforced to the fullest extent permitted by law.
22. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
23. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all other
rights and remedies provided to them by applicable law, rule or
regulation.
24. Beneficiaries. Whenever this Agreement provides for
any payment to be made to the Employee's estate, such payment may
be made instead to such beneficiary or beneficiaries as the
Employee may have designated in writing and filed with the
Company. The Employee shall have the right to revoke any such
designation from time to time and to redesignate any beneficiary
or beneficiaries by written notice to the Company.
25. No Obligation to Mitigate Damages. The Employee shall
not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the
Employee as a result of employment by another employer or by
retirement or by other benefits, either before the date of this
Agreement or after the date of termination of his employment with
the Company under this Agreement.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
27. Bankruptcy Matters. The Company shall take all
necessary steps reasonably available to it so that amounts
payable hereunder shall not be subject to avoidance if the
Company comes under the protection of the federal bankruptcy
laws.
28. Continuation. Employee's employment under the terms of
this Agreement shall not be automatically continued beyond the
termination of this Agreement even if Employee's employment by
the Company continues thereafter. Any continuation of this
Agreement shall only be by express written agreement of Employee
and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ REX O. CORLEY, JR.
/s/ JAMES B. WARREN
James B. Warren
APPENDIX A
SALARY AND BONUSES
A. Salary. The annualized salary rate of Employee during
the term of the Agreement shall be $150,000 (the "Base Salary").
B. Performance Bonus. The Company shall pay to the
Employee, upon execution of this Agreement, a one-time
performance bonus of $25,000 in consideration of services
previously performed by Employee for the Company.
C. Incentive Bonus. The Company shall pay to the Employee
a bonus of up to $100,000 (the "Incentive Bonus") in a lump sum
payment made within 15 days after the first anniversary of the
date of this Agreement, the amount of which bonus shall be based
upon the Company and/or the Employee having achieved certain
performance criteria (the "Bonus Criteria") which Bonus Criteria
shall be established by York Management Services, Inc. and/or Rex
O. Corley, Jr. and the Employee, with approval of the Board of
Directors, within 90 days from the date of this Agreement. The
Bonus Criteria shall be structured so that $50,000 of the
Incentive Bonus will be to compensate Employee for satisfactory
achievement of the Bonus Criteria, with an additional $50,000 for
extraordinary achievement of the Bonus Criteria. In the event
that the Bonus Criteria is not established within 90 days of the
date of this Agreement, the Incentive Bonus shall be $25,000,
payable as hereinabove provided or within 15 days after
Employee's employment is terminated without Cause or for Good
Reason, whichever occurs first.
D. Incentive Compensation. The Company's Board of
Directors shall use its reasonable best efforts to develop, as
soon as is practicable, and in no event later than 120 days after
the date of the Agreement, an executive incentive compensation
program in which Employee shall be eligible to participate. The
program shall be developed after consultation with an executive
compensation consultant, and Employee's rewards under such
program shall be based on goals designed to return the Company to
a profitable position during the term of this Agreement or the
Employee's continued employment with the Company following such
term.
E. Accelerated Vesting of Stock Option. Within ten
business days after the date of this Agreement, the Company and
Employee will enter into an agreement amending the Non-Qualified
Stock Option Agreement (the "Option Agreement") entered into as
of October 4, 1996 by and between the Company and the Employee to
eliminate the vesting criteria set forth in Section 2 of the
Option Agreement and to provide that 100% of the Option to
purchase 50,000 shares of the Company's common stock at the
Exercise Price shall be exercisable by Employee six months from
the date of this Agreement.
APPENDIX B
OTHER BENEFITS
During the term of the Agreement:
A. Vacation. The Employee shall be entitled to three
weeks of noncumulative paid vacation time per year of employment.
B. Medical Benefits. The Employee shall be entitled to
participate in the medical benefit plans provided by the Company
from time to time to its executive officers generally.
C. Other Benefits. The Employee shall be eligible to
participate in any other benefit program provided by the Company
from time to time to its executive officers generally.
D. Relocation and Vehicle Benefits. On May 1, 1997 the
Company shall make the final relocation reimbursement of $3,000
due to Employee pursuant to Employee's prior compensation
arrangement with the Company. Additionally, throughout the term
of this Agreement, the Company shall continue to fulfill the
vehicle provisions of Employee's prior compensation arrangement.
APPENDIX C
DEATH OR DISABILITY
In the event of a termination of the Employee's employment
during the term of the Agreement for the Employee's death or
Disability, the Employee shall be entitled to payment within not
less than 30 days from the date of termination of (a) his salary
through the date of termination to the extent not already paid,
and (b) his Performance Bonus, to the extent not already paid.
APPENDIX D
SEVERANCE
Severance pay and benefits to be provided to the Employee if
the Employee is terminated during the term of the Agreement by
the Company without Cause or the Employee terminates his
employment during the term of the Agreement for Good Reason are
as follows: (a) the Company shall pay to the Employee the amounts
that would be due (at the times they would be due) had employment
terminated by reason of death or Disability and, in addition, an
amount (payable within 30 days after termination of employment)
equal to the additional salary and benefits Employee would have
received had his employment terminated six months after its
actual termination, less any portion thereof that has previously
been paid and less any severance benefits that are payable to
Employee under the Company's Severance Pay Plan with respect to
any "change of control" that occurs prior to the termination of
Employee's employment; and (b) for a period ending on the earlier
of (i) 6 months from the date of termination of Employee's
employment or (ii) Employee's obtaining other full-time permanent
employment, the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services that are
reasonable in scope and cost in relation to his position.
APPENDIX E
TERMINATION
If the employment of Employee is terminated at any time
during the term of the Agreement (i) by Employee without Good
Reason, or (ii) by the Company for Cause, the Company shall be
obligated to Employee only for payment within not less than 30
days from the date of termination of his salary through the date
of termination, to the extent not previously paid.
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Agreement is dated as of June 15, 1997, between Campo
Electronics, Appliances and Computers, Inc. ("Company") and
William E. Wulfers ("Wulfers").
1. Employment. Wulfers will be the Company's President and
Chief Executive Officer ("CEO"), beginning on the date hereof and
continuing until August 31, 2000, unless sooner terminated as
provided herein. He will be appointed a director of the Company,
which will use its best efforts to cause him to be elected
thereafter by its shareholders during his employment. He will
also serve as a director and/or officer of any subsidiary. He
will devote his entire time and attention during normal business
hours to Company business, but he may serve as a member of the
Board or the like of any other entity if doing so does not
unreasonably interfere with his responsibilities.
2. Insurance, etc. The Company will during Wulfers's
employment maintain the same director and officer liability
insurance for him as it has for its other officers and directors;
and will use its reasonable best efforts to maintain the
exculpation and indemnification provisions in its Articles and
By-laws and, if the law permits more protection, to add it.
3. Compensation. The Company will provide for Wulfers for
all services by him, the salary, bonus, stock incentive and other
benefits described in Appendix A, which will not be reduced
without his written consent. He will also be reimbursed for
out-of-pocket expenses incurred on the Company's behalf, upon
presentation of reasonable supporting documentation. All
payments will be net of applicable withholding for taxes and
other required amounts ("Withholding").
4. Disability and Death. (a) If Wulfers becomes Disabled,
the Company may by thirty days written notice to him terminate
his employment unless within such thirty days he becomes capable
of rendering and resumes full time services of the character
contemplated hereby. If he is terminated because he becomes
Disabled, the Company will provide him the benefits described in
Appendix B (less Withholding). "Disability" means:
(i) A condition that would entitle him to benefits
under the Company's long-term disability insurance policy
in effect at the time; or
(ii) If the Company has no such policy, his physical
or mental incapacity to satisfactorily discharge his
duties for 90 consecutive days, if a duly qualified
physician chosen by the Company and acceptable to him or
his legal representatives so certifies in writing, and
the Board determines that he has become disabled.
(b) If Wulfers dies while employed, the Company will
provide his personal representative(s) and/or beneficiaries
designated to the Company in writing with the benefits described
in Appendix B (less Withholding).
5. Termination by Company. If Wulfers is terminated by the
Company for any reason other than Disability or Cause, the
Company will pay him the benefits described in Appendix C (less
Withholding). If his employment is terminated by the Company for
Cause, the Company will pay him the benefits described in
Appendix D (less Withholding). Notwithstanding the foregoing,
his termination after a Change of Control (as defined in Section
1.2 of the Company's Severance Pay Plan (the "Severance Plan"))
will not entitle him to any benefits pursuant to Appendix C or D,
but instead the benefits in accordance with the Severance Plan.
"Cause" means Wulfers's (i) willful and continuing failure
to perform substantially the services contemplated (other than
because of his Disability) within a reasonable time after a
written demand is delivered to him by a representative of the
Board which specifically identifies such failure, or (ii) willful
engaging in misconduct materially injurious to the Company.
6. Termination by Wulfers. (a) If Wulfers terminates his
employment for "Good Reason," the Company will pay him the
benefits described in Appendix C. "Good Reason" means the
Company's:
(i) assigning him any responsibilities inconsistent
with his status, title or position as, or any removal or
failure to reappoint him as, President and CEO, if the
same continues for ten days after written notice thereof
by him to the Company;
(ii) failure to pay when due any amounts hereunder or
to perform any of its material obligations hereunder, if
the same continues for ten days after written notice
thereof is given by him to the Company; or
(iii) requiring him to be based anywhere other than
within a 75-mile radius of the New Orleans, Louisiana
area except for required travel in the Company's ordinary
course of business.
Wulfers's right to terminate his employment for a particular Good
Reason shall end if the Company notifies him in writing that Good
Reason exists specifying the applicable provision hereof and he
fails to exercise such right within 60 days of actual receipt of
such notice.
(b) If Wulfers terminates his employment without Good
Reason, the Company will pay him the benefits described in
Appendix D.
7. Notice of Termination. Any purported notice of termina-
tion shall be given in writing, and if it purports to be for
Cause or for Good Reason, it must specify the termination
provision relied upon and detail the circumstances claimed to
provide Cause or Good Reason.
8. Confidentiality. During his employment and for 15 years
thereafter, Wulfers will not disclose to anyone other than as
authorized by the Company or as required by law or as necessary
for him to perform his duties, any non-public data concerning the
Company in his possession, or any written list(s) of the
Company's customers, suppliers or vendors, or use such
information or lists for his personal benefit, and upon
termination of his employment he will deliver any such
information and list(s) in his possession to the Company.
9. Non-Competition. If his employment is terminated by the
Company for Cause or by him without Good Reason, Wulfers will
not, for two years thereafter, directly or indirectly, be
connected in any manner with any Competitive Business within the
Restricted Market, in competition with the Company Business being
carried on there, so long as the Company carries on a like
business there, except for investments in any publicly held
company of not more than one percent of the equity interest
thereof. "Competitive Business" means any business or line of
business that (i) in whole or in part, is the same as,
substantially similar to, or competitive with, any facet of the
Company Business and (ii) operates, sells, markets, competes or
derives revenue in the Restricted Market. "Company Business"
means the business in which the Company is currently engaged,
including the retail sale and installation of (i) major home
appliances, (ii) consumer electronics and (iii) home office
products. "Restricted Market" means the parishes in Louisiana of
Orleans, Jefferson, East Baton Rouge, St. Tammany, Caddo,
Bossier, Ouachita and Calcasieu and all counties within other
states, within which the Company is then engaged in Company's
Business as specified in writing to Wulfers by the Company at the
time of termination. This covenant shall be deemed a separate and
divisible covenant in each state in which it is sought to be
enforced.
10. Injunctive Relief. If Wulfers breaches or threatens
breach of Paragraph 8 or 9, the Company will be entitled to an
injunction, without bond, restraining him from violating such
Paragraph, in addition to any other remedy it may have.
11. Proprietary Rights. Wulfers agrees to and hereby does
assign to the Company all his rights in and to all inventions,
business plans, work models or procedures, whether or not
patentable, which are made or conceived solely or jointly by him
at any time during his employment or with the use of Company time
or materials. He will disclose to the Company all facts known to
him concerning such matters and at the Company's expense do
everything reasonably practicable to aid it in obtaining and
enforcing proper legal protection for, and vesting in the Company
title to, such matters. At any time, at the Company's request
and expense, he will promptly execute a specific assignment of
title to the Company, and perform any other acts reasonably
necessary to implement the foregoing assignment.
12. Representations and Warranties. Wulfers represents and
warrants that he is under no restriction or obligation
inconsistent with the execution of this Agreement or the
performance of his obligations hereunder, nor any physical or
mental disability that would hinder the performance of his
obligations hereunder.
13. Binding Effect. This Agreement is subject to approval
by, and the Company shall take all necessary steps available to
have it approved as soon as practicable by, the federal
bankruptcy court pursuant to Chapter 11 of the U.S. Bankruptcy
Code. Upon such approval, it shall be binding upon and inure to
the benefit of:
(a) The Company, and any successors or assigns, whether
by way of a merger or consolidation, or a sale of all or
substantially all of its assets, or otherwise; but, if the
Company assigns this Agreement, it shall nevertheless remain
liable to Wulfers in accordance with its terms; and
(b) Wulfers, his estate, his executors, administrators,
heirs and beneficiaries, none of whom shall be permitted to
assign this Agreement or any rights or obligations hereunder.
14. Expenses for Contests. The Company will pay as
incurred, to the extent permitted by law, all reasonable time-
based legal fees and expenses which Wulfers may incur as a result
of any contest of the validity or enforceability of, or liability
under, any provision hereof, but if it is determined by a court
that the position of Wulfers in any such contest is unreasonable
or frivolous, he must reimburse the Company for any fees and
expenses so paid by it.
15. Notices. Any notice required hereunder shall be in
writing, shall be deemed to have been received when delivered in
person, or, if mailed, shall be deemed to have been received on
the third business day after it is deposited in the United States
mail, first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be addressed as
follows:
-----------------------------------------------------------------
If to the Company, with a copy to:
addressed to:
Board of Directors Barbara Treuting Casteix, Esq.
Campo Electronics, Barrios Kingsdorf & Casteix, L.L.P.
Appliances and Computers, Inc.
109 Northpark Blvd., 5th Floor 701 Poydras Street, Suite 3650
Covington, LA 70433 New Orleans, LA 70139
-----------------------------------------------------------------
If to Wulfers, addressed to William E. Wulfers, 300
Linebarger, Bentonville, AR 72712.
or such other address as to which any party may have notified the
other in writing.
16. Governing Law. This Agreement shall be governed by
Louisiana law.
17. Entire Understanding; Waiver. This Agreement, including
the Appendices, all of which are herein incorporated by
reference and made a part hereof, contain the entire understand-
ing between Wulfers and the Company relating to his employment.
No provision hereof or the Appendices may be modified, amended or
waived except in a writing signed by both parties. The waiver by
either party of a breach of any provision hereof shall not
operate or be construed as a waiver of any subsequent breach
thereof.
18. Severability. If any provision hereof, or its
application to any person or circumstance, shall at any time or
to any extent be invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each provision
shall be valid and enforced to the fullest extent permitted by
law.
19. Non-Exclusivity. No remedy specified herein is
exclusive.
20. Mitigation. Wulfers shall not be required to mitigate
damages, nor shall the amount of any payment provided for
hereunder be reduced by any compensation earned by him from
another employer.
21. Continuation. The terms hereof shall not be
automatically continued beyond termination of this Agreement even
if Wulfers's employment continues thereafter. Any continuation
of this Agreement shall only be by express written agreement of
Wulfers and the Company.
CAMPO ELECTRONICS, APPLIANCES
AND COMPUTERS, INC.
By: /s/ RON FORMAN
Title: Chairman, ManagementCommittee and
Member, Compensation Committee
/s/ WILLIAM E. WULFERS
William E. Wulfers
APPENDIX A
Salary
Wulfers shall be paid bi-weekly a salary at an annualized
rate of $300,000.
Bonus
For the fiscal year ending August 31, 1997, Wulfers shall
be entitled to a bonus of $20,833.
For the fiscal year ending August 31, 1998, Wulfers shall
be entitled to a bonus of $100,000.
For each of the fiscal years ending August 31, 1999 and
2000, Wulfers shall be entitled to a bonus equal to $500
per basis point of pre-tax net profit margin as derived by
dividing the Company's pre-tax net profit (without taking
into account any extraordinary items of income or expense)
by the Company's gross revenues. For example, if gross
sales are $200,000,000 and pre-tax net profit is
$2,000,000 then profit margin equals 100 basis points and
the bonus due is $50,000.
Any bonus payable pursuant to this Appendix A shall be
paid in cash not later than the tenth day following the
date the audited financial statements for the period to
which such bonus relates have been completed.
Other Benefits
A. Restricted Stock Award
On the date hereof, Wulfers shall be given 100,000 shares
of Campo restricted common stock, of which 60,000 shares
shall be vested immediately upon grant, an additional
30,000 shares shall vest on the first anniversary date of
the Agreement, and 10,000 shares shall vest on the second
anniversary date of the Agreement. Such shares shall be
granted pursuant to the Company's Stock Incentive Plan and
a Restricted Stock Agreement.
B. Stock Options
Employee shall be granted stock options for Campo common
stock as follows:
Date hereof ............. Options for 100,000 shares
First Anniversary Date....Options for 100,000 shares
Second Anniversary Date...Options for 100,000 shares
No option granted hereunder shall vest and become
exercisable by Wulfers until August 31, 2000. All options
shall have an exercise price equal to the fair market
value of a share of Campo common stock as of the date
immediately preceding the date the option is granted as
provided in the Stock Incentive Plan. All Stock Options
shall be granted pursuant to the Company's Stock Incentive
Plan, as it will be amended, and a Stock Option Agreement
to be entered into with Wulfers.
C. Vacation
Wulfers shall be entitled to four weeks of non-cumulative
paid vacation time per year of employment.
D. Medical Benefits
Until such time as the relocation of Wulfers's family to
the New Orleans area is complete, he shall have the option
of either (i) continuing to be insured under the health
insurance policy of his spouse, in which case he shall be
reimbursed in an amount up to $376.40 per month in
connection with his payment of any health insurance
premiums owed to the health insurer by his spouse or (ii)
electing to be covered, at the Company's sole expense,
under the health insurance program made generally
available by the Company to its executive officers.
Following relocation, only the second option of the
foregoing sentence shall be available to Wulfers.
E. Moving Expenses
Wulfers shall be reimbursed for actual and reasonable
moving expenses, incurred in connection with the
relocation of his family to the New Orleans area,
appropriately invoiced to the Company.
F. Automobile
Wulfers shall be paid $500 per month for an allowance for
car expenses. Additionally, Wulfers shall be reimbursed
for automobile mileage incurred for Company business
travel at the mileage rate customarily paid by the Company
to employees for such travel, not to exceed the IRS
authorized rate.
G. Life Insurance
On or before August 31, 1997, the Company shall have
obtained (and thereafter maintain), at its expense, a
double indemnity term life insurance policy in the amount
of $500,000 insuring the life of Wulfers and naming his
spouse as the beneficiary thereof.
H. Housing Allowance
Wulfers shall be given a housing allowance of $2,000 per
month, which allowance shall continue until the earlier of
(i) the date his family relocates to the New Orleans area
or (ii) December 31, 1998.
I. Travel Expenses
Until such time as Wulfers's family relocates to the New
Orleans area, he shall be reimbursed for his travel
expenses between New Orleans and his current home, up to a
maximum of $15,000 in the aggregate.
J. Other Benefits
Wulfers shall be designated as a participant in the
Company's Severance Pay Plan and Summary Plan Description
(the "Severance Plan") and shall be eligible to
participate in any other benefit program provided by the
Company from time to time to its executive officers
generally.
APPENDIX B
DEATH OR DISABILITY BENEFIT
Payment within not less than 30 days from the date of
termination of (a) his salary and benefits through the date of
termination to the extent not already paid, and (b) an amount
equal to the salary he would have received had his employment
terminated six months after its actual termination.
APPENDIX C
SEVERANCE
Payable within 30 days after termination of employment: (a)
his salary and benefits through the date of termination to the
extent not already paid, and (b) an amount equal to the salary he
would have received had his employment terminated six months
after its actual termination
APPENDIX D
TERMINATION
Payment within not less than 30 days from the date of
termination of his salary through the date of termination, to the
extent not previously paid.
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