Exhibit
10.4


 


EMPLOYMENT AND NON-COMPETITION
AGREEMENT


 


THIS
EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Agreement”) is made as of January 30,
2004, between Poorman-Douglas Corporation, a Rhode Island corporation (the “Company”),
and Edward J. Nimmo (“Executive”).


 


WHEREAS, this Agreement is being entered into in connection with the
merger (the “Merger”) of PD Merger Corp. (“Merger Sub”), an
Oregon corporation and wholly-owned subsidiary of EPIQ Systems, Inc. (“Parent”),
with and into P-D Holding Corp., an Oregon corporation (“Emerald”),
pursuant to that certain Agreement and Plan of Merger, dated as of the date
hereof, by and among Parent, Merger Sub, Emerald and each of the Party
Shareholders named therein (the “Merger Agreement”); and


 


WHEREAS, the Company and Executive desire to enter into this Agreement
providing for Executive’s initial employment by the Company on the terms and
conditions provided herein.


 


NOW, THEREFORE, in consideration of the mutual covenants contained
herein, as well as for the mutual covenants set forth in the Merger Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:


 


1.                                       Employment.  The Company shall employ Executive, and Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in Section 4 hereof (the “Employment Period”).  Although Executive’s principal location for
employment shall be Beaverton, Oregon, Executive agrees that he will travel as
business conditions warrant and as reasonably requested by the Board of
Directors of the Company (the “Board”) and the chief executive officer
of the Company.


 


2.                                       Position
and Duties.


 


(a)                                  During
the Employment Period, Executive shall serve as the president of the Company
and shall have the normal duties, responsibilities, functions and authority of
the president of the Company, subject to the power and authority of each of the
Board and the chief executive officer of the Company to expand or limit such
duties, responsibilities, functions and authority, to overrule actions of
officers of the Company and to alter Executive’s title.  During the Employment Period, Executive
shall render such administrative, financial and other executive and managerial
services to the Company and its Subsidiaries as the chief executive officer of
the Company or the Board may from time to time lawfully and reasonably direct,
including, without limitation, integrating the Company’s and its Subsidiaries’
business into Parent’s business.


 


(b)                                 During
the Employment Period, Executive shall report to the Company’s chief executive
officer and shall devote his best efforts and his full business time and
attention (except for permitted vacation periods and periods of illness or
other incapacity) to the business and affairs of the Company and its
Subsidiaries.  Executive shall perform
his duties, responsibilities and functions to the Company and its Subsidiaries
hereunder to the best of his abilities in a diligent, trustworthy, professional
and efficient manner and shall comply with the Company’s and its Subsidiaries’
policies and procedures in all material respects.


 


(c)           For purposes of this Agreement, “Subsidiaries”
shall mean any corporation or other entity of which the securities or other
ownership interests having the voting power to elect a majority of the board of
directors or other governing body are, at the time of determination, owned by
the Company, directly or through one of more Subsidiaries.


 


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3.                                       Compensation
and Benefits.


 


(a)                                  During
the Employment Period, Executive’s base salary shall be not less than $220,000
per annum (the “Minimum Salary Level” and, as adjusted from time to
time, the “Base Salary”), which salary shall be payable by the Company
in regular installments in accordance with the Company’s general payroll
practices (as such practices may be in effect from time to time).  During the Employment Period, Executive
shall be eligible to participate in the Company’s “Pay for Performance” and
other bonus programs (as they may be modified, replaced or eliminated from time
to time).  The Company’s “Pay for
Performance” program, as in effect on the date hereof, is attached hereto as Exhibit
A.


 


(b)                                 During
the Employment Period and until such time as the Company’s employee benefit
programs are consolidated with those of Parent, Executive shall be entitled to
participate in all of the employee benefit programs of the Company for which
senior executive employees of the Company are generally eligible, as such
programs may be modified, replaced or eliminated from time to time.  After such time as the Company’s employee
benefit programs are consolidated with those of Parent, Executive shall be
entitled to participate in all of the employee benefit programs of Parent and
its Subsidiaries for which senior executive employees of Parent are generally
eligible, as such programs may be modified, replaced or eliminated from time to
time.  Any payment which Executive is
required to make pursuant to such employee benefit programs may be adjusted or
implemented from time to time consistent with changes affecting the participants
generally in such programs.  In
addition, during the Employment Period, Executive shall be entitled to receive
the benefits set forth on Exhibit B attached hereto.


 


(c)           During the Employment Period,
Executive shall be entitled to up to five (5) weeks of paid vacation per
calendar year, which amount shall be pro rated for any partial calendar year of
employment during the Employment Period; provided, however, that
Executive shall schedule such vacation time in a manner consistent with the
business needs of Parent, the Company and their Subsidiaries.  Executive’s unused vacation time shall not
be carried forward to any subsequent calendar year, and no compensation shall
be payable in lieu thereof.


 


(d)           During the Employment Period, the
Company shall reimburse Executive for all reasonable and appropriate expenses
actually incurred by Executive in the course of performing Executive’s duties
and responsibilities under this Agreement, consistent with the Company’s
policies in effect from time to time with respect to such expenses, upon presentation
of expense statements, vouchers or other supporting information as may be
required under the Company’s policies in effect from time to time.


 


(e)           All amounts payable to Executive as
compensation hereunder (including Section 4 hereof) shall be subject to
all required and customary withholding by the Company.


 


4.             Term.


 


(a)           The Employment Period shall end on
January 30, 2008 (the “Termination Date”); provided that (i) the Employment
Period shall terminate prior to the Termination Date immediately upon Executive’s
resignation or retirement (with or without Good Reason), death or Disability,
and (ii) the Employment Period may be terminated by the Company at any time
prior to Termination Date for Cause (as defined below) or without Cause.  Except as otherwise provided herein, any
termination of the Employment Period by the Company shall be effective as
specified in a written notice from the Company to Executive.


 


(b)           If the Employment Period is
terminated by the Company without Cause prior to the Termination Date,
Executive shall be entitled to continue to receive his Base Salary, payable in
regular installments from the date of termination through the Termination Date
(the “Severance Period”).  In
addition, for the year in which Executive’s employment was terminated without
Cause only, Executive shall be entitled to receive, in accordance with the
Company’s then standard payroll practices, a pro rated portion of any bonus
Executive was eligible to receive had Executive’s employment not been
terminated.  Notwithstanding the 


 


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foregoing, Executive shall not
be entitled to receive any amounts pursuant to this Section 4(b) unless
(x) Executive has executed and delivered to the Company a customary release
providing for the release of all claims (if any) Executive may have against
Parent or any of its Subsidiaries, employees or directors (other than claims
for severance due hereunder) (the “Release”), and (y) the Release has
become fully effective in all respects, and Executive has not breached the
provisions of the Release or breached the provisions of Sections 5, 6
or 7 hereof.  In the case of
Executive’s termination without Cause, Executive shall not be entitled to any
other salary, compensation or benefits after termination of the Employment
Period, except as specifically provided for in this Section 4(b) or as
otherwise required by applicable law.


 


(c)           If, prior to the Termination Date,
(i) Executive terminates the Employment Period for Good Reason (as defined below),
or (ii) the Employment Period terminates due to Executive’s death, Executive
shall be entitled to continue to receive his Base Salary, payable in regular
installments in accordance with the Company’s then standard payroll practices
from the date of termination until the Termination Date, plus, for the year in
which the Employment Period was terminated, Executive shall be entitled to
receive, in accordance with the Company’s then standard payroll practices, a
pro rated portion of any bonus Executive was eligible to receive had
Executive’s employment not been terminated. 
Executive will be eligible for the payments described in the foregoing
sentence if, and only if, (x) Executive (or his estate, as the case may be) has
executed and delivered to the Company the Release, and (y) the Release has
become fully effective in all respects, and Executive has not breached the
provisions of the Release or breached the provisions of Sections 5, 6
or 7 hereof.  In the case of
Executive’s termination pursuant to this Section 4(c), Executive shall
not be entitled to any other salary, compensation or benefits after termination
of the Employment Period, except as specifically provided for in this Section
4(c) or as otherwise required by applicable law.


 


(d)           If, prior to the Termination Date,
the Employment Period terminates due to Executive’s Disability, Executive shall
be entitled to continue to receive an amount equal to the amount (if any) by
which Executive’s gross Base Salary exceeds any disability insurance proceeds to
be received by Executive in connection with or as a result of his Disability,
payable in regular installments in accordance with the Company’s then standard
payroll practices from the date of termination until the Termination Date,
plus, for the year in which the Employment Period was terminated due to
Executive’s Disability, Executive shall be entitled to receive, in accordance
with the Company’s then standard payroll practices, a pro rated portion of any
bonus Executive was eligible to receive had Executive’s employment not been
terminated.  Executive will be eligible
for the payments described in the foregoing sentence if, and only if, (x)
Executive has executed and delivered to the Company the Release, and (y) the
Release has become fully effective in all respects, and Executive has not
breached the provisions of the Release or breached the provisions of Sections
5, 6 or 7 hereof.  In
the case of Executive’s termination pursuant to this Section 4(d), Executive
shall not be entitled to any other salary, compensation or benefits after
termination of the Employment Period, except as specifically provided for in
this Section 4(d) or as otherwise required by applicable law.


 


(e)           If the Employment Period is
terminated at any time for any reason other than as described in Section 4(a), 4(b)
or 4(c) above, Executive shall only be entitled to receive his Base
Salary through the date of termination and shall not be entitled to any other
salary, compensation or benefits from the Company or its Subsidiaries thereafter,
except as required by applicable law.


 


(f)            Except as otherwise expressly
provided herein, all of Executive’s rights to salary, bonuses, employee
benefits and other compensation hereunder which would have accrued or become
payable after the termination or expiration of the Employment Period shall
cease upon such termination or expiration, other than those expressly required
under applicable law.


 


(g)           For purposes of this Agreement, “Cause”
shall mean with respect to Executive one or more of the following: (i) the
conviction, plea of guilty or plea of nolo contendre with respect to (x) a
felony of any nature, or (y) any crime involving fraud with respect to Parent
or any of its Subsidiaries or any of their customers, suppliers or other
business relations, (ii) repeated conduct causing Parent or any of its
Subsidiaries substantial public disgrace or disrepute or substantial economic
harm, (iii) the continued failure, as determined


 


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in the good faith reasonable
judgment of the Board, to perform his duties under this Agreement as reasonably
directed by the Board or the chief executive officer of the Company, which
failure is not cured, if curable, within ten (10) business days after delivery
of written notice thereof to Executive, (iv) any act or omission aiding or
abetting a competitor, supplier or customer of Parent or any of its
Subsidiaries to the material disadvantage or detriment of Parent or any of its
Subsidiaries, (v) gross negligence or willful misconduct with respect to Parent
or any of its Subsidiaries or (vi) any material breach of this Agreement which,
if curable, is not cured within ten (10) business days after delivery of
written notice thereof to Executive.


 


(h)           For purposes of this Agreement, “Good
Reason” shall mean if Executive resigns from employment with the Company
prior to the end of the Employment Period as a result of one or more of the
following reasons: (i) the Company reduces the amount of the Base Salary
below the Minimum Salary Level, (ii) the Company reduces Executive’s
responsibilities to a level which is materially inconsistent with the position
of president of the Company, (iii) the Company fails to pay the Base Salary or
other benefits required to be provided by the Company to Executive hereunder,
(iv) the Company materially reduces the overall compensation or benefits
required to be provided by the Company to Executive hereunder, or (v) any
change of Executive’s principal office location to a location more distant than
fifty (50) miles from Beaverton, Oregon; provided that written notice of
Executive’s resignation for Good Reason must be delivered to the Company within
60 days after the occurrence of any such event in order for Executive’s
resignation with Good Reason to be effective hereunder; provided further that,
in order for Executive’s resignation for Good Reason to be effective hereunder,
the Company must not have cured such event (if curable) within 20 days after
receiving written notice thereof.


 


(i)            For the purposes of this Agreement,
“Disability” shall mean the Executive’s inability to perform the
essential duties, responsibilities and functions of his position with the
Company and its Subsidiaries as a result of any mental or physical impairment
or incapacity even with reasonable accommodations of such disability or
incapacity provided by the Company and its Subsidiaries or if providing such
accommodations would be unreasonable, all as determined by the Board in its
reasonable good faith judgment. 
Executive shall cooperate in all respects with the Company if a question
arises as to whether he has become disabled.


 


5.                                       Confidential
Information.


 


(a)           Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Subsidiaries (including those obtained by
him while employed by Emerald and its Subsidiaries prior to the date of this
Agreement and the Merger) concerning the business or affairs of Parent,
Emerald, the Company, or any other Subsidiary of Parent (“Confidential
Information”) are the property of Parent, Emerald, the Company, or such
Subsidiary.  Therefore, Executive agrees
that he shall not disclose to any person or entity or use for his own purposes
any Confidential Information or any confidential or proprietary information of
other persons or entities in the possession of Parent and its Subsidiaries (“Third
Party Information”), without the prior written consent of the chief
executive officer of the Company or the Board, unless and to the extent that
the Confidential Information or Third Party Information becomes generally known
to and available for use by the public other than as a result of Executive’s
acts or omissions.  Executive shall
deliver to the Company at the termination or expiration of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer files, disks and tapes, printouts and
software and other documents and data (and copies thereof) embodying or
relating to Third Party Information, Confidential Information, Work Product (as
defined below) or the business of Parent, the Company or any other Subsidiaries
which Executive may then possess or have under his control.


 


(b)           Executive shall be prohibited from
using or disclosing any confidential information or trade secrets that
Executive may have learned through any prior employment; provided it is
understood that Executive shall be allowed to use the confidential information
and trade secrets of Emerald and its Subsidiaries in connection with
Executive’s duties hereunder.  If at any
time during his employment with the Company or


 


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any of its Subsidiaries,
Executive believes he is being asked to engage in work that will, or will be
likely to, jeopardize any confidentiality or other obligations Executive may
have to former employers, Executive shall immediately advise the chief
executive officer of the Company so that Executive’s duties can be modified
appropriately.  Executive represents and
warrants to the Company that Executive took nothing with him which belonged to
any former employer when Executive left his prior position and that Executive
has nothing that contains any information which belongs to any former employer.  If at any time Executive discovers this is
incorrect, Executive shall promptly return any such materials to Executive’s
former employer.  The Company does not
want any such materials, and Executive shall not be permitted to use or refer
to any such materials in the performance of Executive’s duties hereunder.


 


6.             Intellectual Property,
Inventions and Patents.  Executive
acknowledges that all discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports,
patent applications, copyrightable work and mask work (whether or not including
any confidential information) and all registrations or applications related
thereto, all other proprietary information and all similar or related information
(whether or not patentable) which relate to Parent’s or any of its
Subsidiaries’ actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive (whether alone or jointly with others) while employed by the
Company or its predecessor and its Subsidiaries, whether before or after the
date of this Agreement (“Work Product”), belong to Parent or such
Subsidiary.  Executive shall promptly
disclose such Work Product to the chief executive officer of the Company and,
at the Company’s expense, perform all actions reasonably requested by the chief
executive officer of the Company or the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other
instruments).  Executive acknowledges
that all Work Product shall be deemed to constitute “works made for hire” under
the U.S. Copyright Act of 1976, as amended.


 


7.             Non-Compete and Non-Solicitation.


 


(a)                                  Executive
acknowledges that during the course of his employment with the Company and its
Subsidiaries he shall become familiar with Parent’s and the Company’s trade
secrets and with other Confidential Information concerning the Parent, the
Company and their Subsidiaries and that Executive’s services shall be of
special, unique and extraordinary value to Parent, the Company and its
Subsidiaries.  Therefore, in
consideration of the consummation of the transactions contemplated by the
Merger Agreement, the Company’s agreement to employ Executive and the
compensation to be paid to Executive hereunder and under the Merger Agreement,
Executive agrees that, until the later of (i) the date that is five years after
the date hereof and (ii) the date that is two (2) years after the date of
termination of the Employment Period (the “Noncompete Period”),
Executive shall not, anywhere in North America, directly or indirectly own any
interest in, manage, control, participate in, consult with, render services
for, be employed in an executive, managerial or administrative capacity by, or
in any manner engage in any business competing with the businesses of Parent or
any of its Subsidiaries, as such businesses exist or are in process during the
Employment Period or on the date of the termination or expiration of the
Employment Period.  Nothing herein shall
prohibit Executive from being a passive owner of not more than 4.9% of the
outstanding stock of any class of a corporation which is publicly traded, so
long as Executive has no active participation in the business of such
corporation.


 


(b)           During the Noncompete Period,
Executive shall not directly or indirectly through another person or entity (i)
induce or attempt to induce any employee of Parent or any of its Subsidiaries
to leave the employ of Parent or such Subsidiary, or in any way interfere with
the relationship between Parent or any of its Subsidiaries and any employee
thereof, (ii) hire any person who was an employee of Parent or any of its
Subsidiaries at any time during the Employment Period or (iii) induce or
attempt to induce any customer, referral source, supplier, licensee, licensor,
franchisee or other business relation of Parent or any of its Subsidiaries to
cease doing business with Parent or such Subsidiary, or in any way interfere
with the relationship between any such customer, supplier, licensee or business
relation and Parent or any of its Subsidiaries.


 


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8.                                       Enforcement.
 If, at the time of enforcement of Sections
5, 6 or 7 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by law.  Because Executive’s services are unique and
because Executive has access to Confidential Information and Work Product, the
parties hereto agree that Parent and the Company would suffer irreparable harm
from a breach of Sections 5, 6 or 7 by Executive and that
money damages would not be an adequate remedy for any such breach of this
Agreement.  Therefore, in the event of a
breach or threatened breach of this Agreement, the Company or its successors or
assigns, in addition to other rights and remedies existing in their favor,
shall be entitled to specific performance and/or injunctive or other equitable
relief from a court of competent jurisdiction in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other
security).  Executive acknowledges (i)
that the restrictions contained in Section 7 are reasonable, (ii) that
Executive has reviewed the provisions of this Agreement with his legal counsel
and (iii) that Executive is entering into this Agreement upon Executive’s
initial employment of the Executive with the Company and its Subsidiaries.


 


9.             Executive’s Representations.  Executive hereby represents and warrants to
the Company that (i) the execution, delivery and performance of this Agreement
by Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompete agreement or confidentiality
agreement with any other person or entity and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid
and binding obligation of Executive, enforceable in accordance with its terms.  Executive hereby acknowledges and represents
that he has consulted with independent legal counsel regarding his rights and
obligations under this Agreement and that he fully understands the terms and
conditions contained herein.


 


10.           Survival.  Sections 4 through 22,
inclusive, shall survive and continue in full force in accordance with their
terms notwithstanding the expiration or termination of the Employment Period.


 


11.           Notices.  Any notice or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (i) when personally
delivered or sent by telecopy (with hard copy to follow), (ii) one business day
after being sent by reputable overnight express courier (charges prepaid), or
(iii) five days following mailing by certified or registered mail, postage
prepaid and return receipt requested. 
Unless another address is specified in writing, notices and
communications to Executive and the Company shall be sent to the addresses
indicated below:


 


Notices to
Executive:


 


Edward J.
Nimmo

8805 SW Woodside Drive

Portland, OR 97225


 


With a copy
to:


 


Kurt W. Ruttum

Tonkon Torp LLP

1600 Pioneer Tower

888 SW Fifth Avenue

Portland, Oregon 97204

Fax No. (503) 972-3743


 


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Notices to the
Company:


 


Poorman-Douglas
Corporation

Attention: Board of Directors

10300 SW Allen Blvd.

Beaverton, OR 97005


 


With a copy to:


 


EPIQ Systems, Inc.

Attention: Chief Financial Officer

501 Kansas Avenue

Kansas City, KS 66105


 


12.                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any action in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.


 


13.           Complete Agreement.  This Agreement, the Merger Agreement, those
documents expressly referred to herein or in the Merger Agreement and other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way (including, without
limitation, (x) the Executive Compensation, Benefits and Contingent Severance
Agreement between Edward J. Nimmo and Poorman-Douglas Corporation, dated March
1, 2001, and (y) the Employee Nondisclosure, Developments and Nonsolicitation
Agreement between Edward J. Nimmo and Poorman-Douglas Corporation, dated March
1, 2001, each of which shall be terminated and of no further force or effect as
of the date of the execution and delivery of this Agreement), but excluding any
breaches thereof by either party prior to the date hereof).


 


14.                                 No
Strict Construction.  The language
used in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction shall
be applied against any party.


 


15.           Counterparts.  This Agreement may be executed in separate
counterparts (including by means of telecopier signature pages), each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.


 


16.           Successors and Assigns.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his duties or obligations hereunder without the prior
written consent of the Company.


 


17.           Choice of Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Oregon, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Oregon or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Oregon.


 


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18.                                 Amendment
and Waiver.  The provisions of this
Agreement may be amended or waived only with the prior written consent of the
Company and Executive, and no course of conduct or course of dealing or failure
or delay by any party hereto in enforcing or exercising any of the provisions
of this Agreement (including, without limitation, the Company’s right to
terminate the Employment Period for Cause) shall affect the validity, binding
effect or enforceability of this Agreement or be deemed to be an implied waiver
of any provision of this Agreement.


 


19.           Insurance.  The Company may, at its discretion, apply
for and procure in its own name and for its own benefit life and/or disability
insurance on Executive in any amount or amounts considered advisable.  Executive agrees to cooperate in any medical
or other examination, supply any information and execute and deliver any
applications or other instruments in writing as may be reasonably necessary to
obtain and constitute such insurance. 
Executive hereby represents that he has no reason to believe that his
life is not insurable at rates now prevailing for healthy men of his age.


 


20.           Indemnification and Reimbursement
of Payments on Behalf of Executive. 
The Company and its Subsidiaries shall be entitled to deduct or withhold
from any amounts owing from the Company or any of its Subsidiaries to Executive
any federal, state, local or foreign withholding taxes, excise tax, or
employment taxes (“Taxes”) imposed with respect to Executive’s compensation or
other payments from the Company or any of its Subsidiaries or Executive’s
ownership interest in the Company (including, without limitation, wages,
bonuses, dividends, the receipt or exercise of equity options and/or the
receipt or vesting of restricted equity). 
In the event the Company or any of its Subsidiaries does not make such
deductions or withholdings, Executive shall indemnify the Company and its
Subsidiaries for any amounts paid by the Company with respect to any such
Taxes.


 


21.           Dispute Resolution.


 


(a)           Except as otherwise expressly
provided in this Agreement, the parties agree that the arbitration procedure
set forth below shall be the sole and exclusive method for resolving and
remedying any and all disputes, controversies or claims that arise out of or in
connection with, or relate in any manner to, the rights and liabilities of the
parties hereunder or any provision of this Agreement or the interpretation,
enforceability, performance, breach, termination or validity hereof, including
this Section 21 relating to the resolution of disputes (the “Disputes”)
and questions concerning arbitrability and including any claim under any state
or federal statute or common law theory governing or relating to the employment
relationship (except claims for workers compensation or unemployment benefits);
provided that nothing in this Section 21 shall prohibit a party
hereto from instituting litigation to enforce any Final Determination (as
defined below).  The parties hereby
acknowledge and agree that, except as otherwise provided in this Section 21
or in the applicable rules for arbitration of business disputes (the “Rules”)
promulgated by the Arbitration Service of Portland, Inc. (the “Arbitration
Service”) as in effect from time to time, the arbitration procedures and
any Final Determination hereunder shall be governed by, and shall be enforced
pursuant to, the United States Arbitration Act, 9 U.S.C. §1 et. seq.


 


(b)           Except as provided elsewhere herein,
in the event that any party asserts that there exists a Dispute, such party
shall deliver a written notice to each other party involved therein specifying
the nature of the asserted Dispute and requesting a meeting to attempt to
resolve the same.  If no such resolution
is reached within ten business days after the delivery of such notice, the
party delivering such notice of Dispute (the “Disputing Person”) may
thereafter commence arbitration hereunder by delivering to each other party
involved therein a notice of arbitration (a “Notice of Arbitration”).  Such Notice of Arbitration shall specify the
nature of any Dispute and any other matters required by the Rules as in effect
from time to time to be included therein. 
The Arbitrator shall permit and facilitate such discovery as the parties
shall reasonably request.  The Company and
Executive shall mutually agree upon one arbitrator to resolve any Dispute pursuant
to the procedures set forth in this Section 21 and the Rules.  If the Company and Executive cannot mutually
agree to an arbitrator within 15 days from receipt of the Notice of
Arbitration, the arbitrator shall be appointed by the


 


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Arbitration Service within 15
days of being notified in writing of the Arbitration Service’s need to make
such appointment or as soon thereafter as may be practicable.


 


(c)                                  Except
as otherwise provided by applicable law, the Company will pay all costs of the
Arbitration Service and the arbitrator, less those amounts Executive would
otherwise be required to pay if the claims were litigated in a court of law; provided
that at the conclusion of the arbitration, the arbitrator shall award costs
and expenses (including the costs of the arbitration previously advanced and
the fees and expenses of attorneys, accountants and other experts) and
reasonable interest to the prevailing party.


 


(d)           The arbitration shall be conducted in
Portland, Oregon under the Rules as in effect from time to time.  The parties shall use their reasonable best
efforts to cause the arbitrator to conduct the arbitration so that a final
result, determination, finding, judgment and/or award (the “Final Determination”)
is made or rendered as soon as practicable, but in no event later than 90
business days after the delivery of the Notice of Arbitration nor later than 30
days following completion of the arbitration. 
Notwithstanding any Oregon law to the contrary, the Final Determination
shall be final and binding on all parties and there shall be no appeal from or
reexamination of the Final Determination, except for fraud, perjury, evident
partiality or misconduct by an arbitrator prejudicing the rights of any party
and to correct manifest clerical errors.


 


(e)           Notwithstanding anything to the
contrary, nothing in this Section 21 shall be construed to impair the
right of any person or entity to seek injunctive or other equitable relief in
any court of competent jurisdiction.


 


21.           Executive’s Cooperation.  During the Employment Period and thereafter,
Executive shall cooperate with Parent and its Subsidiaries in any internal
investigation, any administrative, regulatory or judicial proceeding or any
dispute with a third party as reasonably requested by the Company (including,
without limitation, Executive being available to the Company upon reasonable
notice for interviews and factual investigations, appearing at the Company’s
request to give testimony without requiring service of a subpoena or other
legal process, volunteering to the Company all pertinent information and
turning over to the Company all relevant documents which are or may come into
Executive’s possession, all at times and on schedules that are reasonably
consistent with Executive’s other activities and commitments). In the event the
Company requires Executive’s cooperation in accordance with this Section 22,
the Company shall (i) reimburse Executive solely for reasonable travel expenses
(including lodging and meals) upon submission of receipts; and (ii) if
Executive is no longer employed by the Company, pay Executive a per diem
consulting charge of $750.00 and pay the reasonable fees and expenses of
attorneys, accountants and other professionals retained by Employee with
respect to such matter or matters.


 


*   *   *   *   *


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Employment and Non-Competition
Agreement as of the date first written above.


 


 


	
   

  	
  POORMAN-DOUGLAS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/   Elizabeth
  Braham

  	
   

  
	
   

  	
  Name:

  	
  Elizabeth M. Braham

  
	
   

  	
  Its:

  	
  Chief Financial
  Officer, Secretary and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
     /s/   Edward
  J. Nimmo

  	
   

  
	
   

  	
  Edward J.
  Nimmo

  



 


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