EXHIBIT 10.13
EMPLOYMENT AGREEMENT
Technology Solutions Company, a Delaware corporation doing business as
TSC, and Xxxxx X. Xxxxxxxxx ("Employee") enter into this Employment Agreement
("Agreement") as of March 27, 1998.
In consideration of the agreements and covenants contained in this
Agreement, TSC and Employee agree as follows:
1. EMPLOYMENT DUTIES: TSC shall employ Employee as an Executive Vice
President based in New York. Employee shall have responsibilities, duties and
authority as the President and Chief Executive Officer may reasonably
designate and are commensurate with the position of Executive Vice President.
Employee shall perform faithfully the duties assigned to him to the best of
his ability and shall devote his full and undivided business time and
attention to the transaction of TSC's business.
2. TERM OF EMPLOYMENT: The term of employment ("Term of Employment")
covered by this Agreement shall commence as of the effective date of this
Agreement and continue until terminated pursuant to Paragraph 3 below.
TERMINATION: This Agreement may be terminated as follows:
(a) TSC may terminate Employee's employment and this Agreement for any
reason upon giving Employee 90 days notice of termination. TSC may make the
termination effective at any time within the 90 day notice period
("Termination Date"). During this period Employee shall make a good faith
effort to satisfy those professional obligations requested to be performed by
TSC, which may include transferring duties and assisting in the transition of
client responsibilities, including meeting with clients and transferring
confidential material. TSC must, however, for a period of two years
following the Termination Date, unless Employee is terminated for Serious
Misconduct, continue Employee's base salary on the Termination Date ("Current
Salary"); provide a bonus equal to the average annual bonus earned during the
two fiscal years immediately preceding the termination ("Average Bonus") for
each of the two years, payable each year when annual bonuses are paid; and
continue his health insurance benefits and short term disability benefits
until the end of the two year period or until Employee is re-employed,
whichever comes first. (These payments are referred to collectively as
"Termination Payments").
(b) TSC may terminate Employee's employment and this Agreement
immediately without notice and with no salary and benefit continuation if
Employee engages in "Serious Misconduct." For purposes of this Agreement,
"Serious Misconduct" means embezzlement or misappropriation of corporate
funds, other acts of material dishonesty, significant activities materially
harmful to TSC's reputation, or any significant violation of any statutory or
common law duty of loyalty to TSC.
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(c) If, following a Change in Control, Employee's title, position,
salary, or benefits is reduced or Employee's duties or status is materially
reduced, and Employee resigns within 90 days after the reduction becomes
effective, or if Employee is ordered to relocate his residence for a period
in excess of six months to any location outside of the metropolitan area
where he resides when the Change in Control occurs and Employee declines and
is terminated, Employee shall receive his Termination Payments.
Notwithstanding anything to the contrary in any of Employee's stock option
agreements, Employee's unvested TSC shares at option shall vest automatically
upon a Change in Control. (A Change in Control is defined as (i) the
acquisition by any individual, entity or group, of beneficial ownership
(within the meaning of Rule 13 d-3 promulgated under the Securities Exchange
Act of 1934) of 40% or more of the outstanding shares of the common stock of
TSC; (ii) the approval of the stockholders of TSC of a merger, where
immediately after the merger, persons who were the holders of a majority of
TSC's outstanding common stock immediately prior to the merger fail to own at
least a majority of the outstanding common stock of the surviving entity in
substantially the same proportions as their holdings of TSC common stock
immediately prior to the merger; or (iii) the sale of substantially all the
assets of TSC other than to a corporation in which more than 60% of the
outstanding shares are beneficially owned by the individuals and entities who
are the beneficial owners of the Company stock prior to the acquisition.)
(d) If Employee dies, TSC must continue Employee's Current Salary and
health insurance benefits for a period of one year following the date of his
death, and, in addition, provide an Average Bonus, all payable to Employee's
estate. If Employee becomes permanently disabled and unable to continue to
work at TSC, TSC must pay Employee's Current Salary, health insurance
benefits and an Average Bonus, for a period of one year following the date
Employee is declared permanently disabled.
(e) If either party materially breaches this Agreement and fails to cure
the breach within 30 days after receiving notice of the breach from the
breached party, the breached party may consider this Agreement as terminated
by the breaching party.
(f) Employee may terminate his employment upon giving TSC 90 days
notice. TSC may make the termination effective at any time within the 90 day
notice period. During this period Employee shall make a good faith effort to
satisfy those professional obligations requested to be performed by TSC,
which may include transferring duties and assisting in the transition of
client responsibilities, including meeting with clients.
(g) Notwithstanding anything in the foregoing to the contrary, if any of
the payments to Employee provided for in this Agreement, together with any
other payments which Employee has the right to receive from TSC or any
corporation which is a member of an "affiliated group" as defined in Section
1504(a) of the Code without regard to Section 1504(b) of the Internal Revenue
Code) of which TSC is a member, would constitute a "parachute payment" (as
defined in Section 280G(b)(2) of the Internal Revenue Code), the payments
pursuant to this Agreement shall be reduced to the largest amount as will
result in no portion of such payments being subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code; provided, however, that in
determining whether any reduction in the payments under this Agreement
pursuant to this
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sentence is necessary, the mutually agreed upon value for the non-compete
provision as determined by an outside expert shall be deducted from the value
of the parachute payment. If after applying the value for the non-compete
provision, a reduction in payment is still necessary, the Employee shall
determine what portion of the parachute payment shall be reduced, and such
determination shall be conclusive and binding on TSC with respect to its
treatment of the payment for tax reporting purposes.
4. SALARY: As compensation for his services, TSC shall pay Employee
a base salary of not less than the amount listed in Exhibit A to this
Agreement. Employee's base salary shall be subject to annual review and may,
at the discretion of TSC's management, be adjusted from that listed in
Exhibit A according to Employee's responsibilities, capabilities and
performance during the preceding year.
5. BONUS AND STOCK OPTIONS: Employee shall participate in TSC's Vice
Presidents Compensation Program, as amended from time to time, which includes
base salary, annual bonus, and equity.
6. EMPLOYEE BENEFITS: During the Term of Employment, Employee shall
be entitled to participate in such employee benefit plans, including group
pension, life and health insurance and other medical benefits, and shall
receive all other fringe benefits as TSC may make available generally to its
Executive Vice Presidents.
7. BUSINESS EXPENSES: TSC shall reimburse Employee for all
reasonable and necessary business expenses incurred by Employee in performing
his duties. Employee shall provide TSC with supporting documentation
sufficient to satisfy reporting requirements of the Internal Revenue Service
and TSC.
8. NONCOMPETITION AND NONDISCLOSURE: Employee acknowledges that the
successful development and marketing of TSC's professional services and
products require substantial time and expense. Such efforts generate for TSC
valuable and proprietary information ("Confidential Information") which gives
TSC a business advantage over others who do not have such information.
Confidential Information of TSC and its clients and prospects includes, but
is not limited to, the following: business strategies and plans; proposals;
deliverables; prospects and customer lists; methodologies; training
materials; and computer software. Employee acknowledges that during the Term
of Employment, he will obtain knowledge of such Confidential Information.
Accordingly, Employee agrees to undertake the following obligations which he
acknowledges to be reasonably designed to protect TSC's legitimate business
interests without unnecessarily or unreasonably restricting Employee's
post-employment opportunities:
(a) Upon termination of the Term of Employment for any reason, Employee
shall return all TSC property, including but not limited to computer
programs, files, notes, records, charts, or other documents or things
containing in whole or in part any of TSC's Confidential Information;
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(b) During the Term of Employment and subsequent to termination,
Employee agrees to treat all such Confidential Information as confidential
and to take all necessary precautions against disclosure of such information
to third parties during and after Employee's employment with TSC. Employee
shall refrain from using or disclosing to any person, without the prior
written approval of TSC's Chief Executive Officer, any Confidential
Information unless at that time the information has become generally and
lawfully known to TSC's competitors;
(c) Without limiting the obligations of Paragraph 8(b), Employee shall
not, for himself or as an agent, partner or employee of any person, firm or
corporation: (i) for a period of two years following his termination of
employment for any reason, engage in the practice of consulting or related
services for any client of TSC for whom Employee performed services, or
prospective TSC client to whom Employee submitted, or assisted in the
submission of a proposal during the two year period preceding his termination
of employment; or (ii) for a period of two years following any involuntary
termination for any reason, or for a period of six months following
Employee's voluntary termination from TSC so long as TSC continues to pay his
salary during the six month period, participate in or have a financial,
management or other interest in any business enterprise that engages in, or
within two years of the termination of Employee's employment has plans to
engage in, substantial and direct competition with TSC if such participation
will likely involve the use by Employee of business plans, strategies and
other confidential TSC business information developed or acquired by Employee
during his employment as a senior officer of TSC;
(d) During a two year period immediately following Employee's
termination of employment for any reason, Employee shall not induce or assist
in the inducement of any TSC employee away from TSC's employ or from the
faithful discharge of such employee's contractual and fiduciary obligations
to serve TSC's interests with undivided loyalty;
(e) For two years following his termination of employment for any
reason, Employee shall keep TSC currently advised in writing of the name and
address of each business organization for which he acts as agent, partner,
representative or employee.
9. REMEDIES: Employee recognizes and agrees that a breach of any or
all of the provisions of Paragraph 8 will constitute immediate and
irreparable harm to TSC's business advantage, including but not limited to
TSC's valuable business relations, for which damages cannot be readily
calculated and for which damages are an inadequate remedy. Accordingly,
Employee acknowledges that TSC shall therefore be entitled to an order
enjoining any further breaches by the Employee.
10. INTELLECTUAL PROPERTY: During the Term of Employment, Employee shall
disclose to TSC all ideas, inventions and business plans which he develops
during the course of his employment with TSC which relate directly or indirectly
to TSC's business, including but not limited to any computer programs,
processes, products or procedures which may, upon application, be protected by
patent or copyright. Employee agrees that any such ideas, inventions or
business plans shall be the property of TSC and that
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Employee shall at TSC's request and cost, provide TSC with such assurances as
is necessary to secure a patent or copyright.
11. PRINCIPLES AND POLICIES: Employee agrees to be bound by TSC's
principles and policies, including Principles and Policies of Business
Conduct, as amended from time to time, which is incorporated herein by
reference.
12. ASSIGNMENT: Employee acknowledges that the services to be rendered
pursuant to this Agreement are unique and personal. Accordingly, Employee
may not assign any of his rights or delegate any of his duties or obligations
under this Agreement. Subject to Paragraph 3(c) above, TSC may assign its
rights, duties or obligations under this Agreement to a subsidiary or
affiliated company of TSC or purchaser or transferee of a majority of TSC's
outstanding capital stock or a purchaser of all, or substantially all, of the
assets of TSC. In the event of such an assignment TSC agrees to guarantee
performance of all of its obligations hereunder which are assigned.
13. NOTICES: All notices shall be in writing, except for notice of
termination of employment, which may be oral if confirmed in writing within
14 days. Notices intended for TSC shall be sent by registered or certified
mail addressed to it at 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000 or its current principal office, and notices intended for
Employee shall be either delivered personally to him or sent by registered or
certified mail addressed to his last known address.
14. ENTIRE AGREEMENT: This Agreement and Exhibit A attached hereto
constitute the entire agreement between TSC and Employee. Neither Employee
nor TSC may modify this Agreement by oral agreements, promises or
representations. The parties may modify this Agreement only by a written
instrument signed by the parties.
15. APPLICABLE LAW: This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
16. MEDIATION OF DISPUTES: Neither party shall initiate arbitration or
other legal proceedings (except for any claim under Paragraph 8 of this
Agreement), against the other party, or, in the case of TSC, any of its
directors, officers, employees, agents, or representatives, relating in any
way to this Agreement, to Employee's employment with TSC, the termination of
his employment or any or all other claims that one party might have against
the other party until 30 days after the party against whom the claim[s] is
made ("Respondent") receives written notice from the claiming party of the
specific nature of any purported claim and the amount of any purported
damages. Employee and TSC further agree that if Respondent submits the
claiming party's claim to the Center for Public Resources, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, for nonbinding mediation prior to the expiration of
such 30 day period, the claiming party may not institute arbitration or other
legal proceedings against Respondent until the earlier of (i) the completion
of nonbinding mediation efforts, or (ii) 90 days after the date on which the
Respondent received written notice of the claimant's claim.
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17. BINDING ARBITRATION: Employee and TSC agree that all claims or
disputes relating to his employment with TSC or the termination of such
employment, and any and all other claims that Employee might have against
TSC, any TSC director, officer, employee, agent, or representative, and any
and all claims or disputes that TSC might have against Employee (except for
any claims under Paragraph 8 of this Agreement) shall be resolved by
expedited arbitration. Such arbitration shall be conducted before a single
arbitrator within twenty days of the submission of a claim. The parties
shall select an arbitrator by mutual agreement. The parties shall use their
best efforts to select an arbitrator who is a former judge experienced in
arbitrating employment disputes. If the parties are unable to agree on an
arbitrator, Jams/Endispute, Inc. shall select an arbitrator in accordance
with its procedures.
Both parties agree that the arbitrator's award shall be final and
binding, and the parties waive any right to appeal.
18. SEVERABILITY: Whenever possible, each provision of this Agreement
will 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
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
19. Employee acknowledges that he has read, understood and accepts the
provisions of this Agreement.
XXXXX X. XXXXXXXXX TECHNOLOGY SOLUTIONS COMPANY
Xxxxx X. Xxxxxxxxx By: Xxxx X. Xxxxxx
__________________ ________________________
Xxxxx X. Xxxxxxxxx Xxxx X. Xxxxxx
President and Chief
Executive Officer
Date: March 27, 1998 Date: March 27, 1998
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EXHIBIT A
EMPLOYEE: Xxxxx X. Xxxxxxxxx
POSITION: Executive Vice President
BASE SALARY: $450,000.00
EFFECTIVE DATE: March 27, 1998
Employee: Xxxxx X. Xxxxxxxxx
__________________
Xxxxx X. Xxxxxxxxx
Date: March 27, 1998
__________________
TSC: Xxxx X. Xxxxxx
__________________
Xxxx X. Xxxxxx
Date: March 27, 1998
__________________
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