EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of January 1, 1998, is entered
into between Technisource, Inc., a Florida corporation (the "Company"), and Xxxx
Xxxxx (the "Executive").
RECITALS
A. Executive is currently employed by the Company as a senior
executive officer and is an integral part of its management.
The Board of Directors of the Company recognizes the Executive
as a key officer of the Company, and consequently has approved
the terms and conditions of the continued employment of
Executive as set forth herein and has authorized the execution
and delivery of this Agreement.
B. Executive was has been employed by the Company pursuant to a
letter agreement dated October 23, 1993 (the "Old Agreement").
This Agreement supersedes and replaces in its entirety the Old
Agreement with respect to the terms and conditions of
Executive's employment by the Company. Upon the effective date
of this Agreement, the Old Agreement shall be deemed
terminated and of no further force and effect.
AGREEMENT
For and in consideration of the foregoing and of the mutual covenants
of the parties herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. EMPLOYMENT. The Company hereby employs Executive to serve in the capacities
described herein and Executive hereby accepts such employment and agrees to
perform the services described herein upon the terms and conditions hereinafter
set forth.
2. TERM. The term of Executive's employment pursuant to this Agreement shall
commence as of the date hereof and shall continue for a period of three years,
subject to earlier termination in accordance with Section 9 hereof and the other
terms, provisions, and conditions set forth herein. Sixty days prior to the end
of the term of the Agreement (or any renewal term), either the Company or the
Employee may give notice to the other of its determination not to renew this
Agreement. If a notice of non-renewal is not delivered, this Agreement will
automatically continue in effect for successive one (1) year renewal terms. If
such notice of non-renewal is given by any party, then Executive's employment
will terminate at the end of such term (or on such other date as the parties
mutually agree).
3. DUTIES. Executive shall serve as and have the title of Vice President of
Sales and Director of National Sales of the Company; provided that the Company
may change Executive's duties and titles such that Executive serves as a
Regional Sales Manager. Executive agrees to devote substantially his entire
time, energy, and skills to such employment while so employed.
4. COMPENSATION.
(a) BASE COMPENSATION. The Company shall pay Executive, and
Executive agrees to accept, base compensation at the rate of not less than
$175,000 per year in equal, monthly installments through the term of this
Agreement ("Base Compensation"). The Base Compensation specified in this Section
4(a) may be increased at any time during the term of this Agreement in the
discretion of the Board of Directors and will be reviewed no less frequently
than during the first quarter of each calendar year beginning in 1999. No
increase in the Base Compensation pursuant to this Section 4(a) shall at any
time operate as a cancellation of this Agreement; any such increase shall
operate merely as an amendment hereof, without any further action by Executive
or the Company. If any such increase or increases shall be so authorized, all of
the terms, provisions and conditions of this Agreement shall remain in effect as
herein provided, except that the Base Compensation set forth in this Section
4(a) shall be deemed amended to set forth the higher amount of such Base
Compensation to Executive.
(b) BONUS COMPENSATION. Executive shall be eligible for an
annual bonus ("Bonus Compensation") payable within 90 days following the end of
each fiscal year of the Company during the term of Executive's employment under
this Agreement. The amount of Executive's Bonus shall be determined by the Board
of Directors of the Company after consideration of any recommendations made by
the Compensation Committee of the Board of Directors, based upon Executive's
performance and the performance of the Company during such year. Notwithstanding
the foregoing, following the Company's 1998 fiscal year, Executive shall be
entitled to recieve (i) a bonus of $75,000 plus (ii) an additional bonus in an
amount equal to $1,923 multiplied by the percentage increase in the Company's
earnings before interest and taxes ("EBIT") in 1998 compared to 1997 in excess
of 35%, provided that in no event shall such additional bonus exceed $125,000.
For example, if the Company's EBIT increases by 75% in 1998 compared to 1997,
Executive's bonus following the 1998 fiscal year would be equal to $75,000 plus
$76,920 ($1,923 x 40% (75% - 35%)), for a total bonus following the Company's
1998 fiscal year of $151,920.
(c) ANNUAL STOCK OPTIONS. Executive shall be eligible to
receive an annual stock option award (the "Annual Stock Options") following each
fiscal year of the Company in amounts, at such exercise prices, and on such
terms as the Board of Directors determines, based upon the performance of the
Executive and the Company during such fiscal year.
(d) STOCK OPTION AWARD. The Company has awarded Executive
stock options on the terms and in the form attached hereto as Exhibit A.
5. FRINGE BENEFITS.
(a) GENERALLY. Executive shall be eligible for fringe benefits
pursuant to any insurance, pension or other employee fringe benefit plan
approved by the Board of Directors that now or hereafter may be made available
to employees of the Company and for which Executive will qualify according to
his eligibility under the provisions thereof; provided, however, that such
eligibility specifically does not apply to matters relating to Executive's
vacation, disability benefits, and compensation, which matters shall be governed
exclusively by the terms hereof.
(b) VACATION. During the term of this Agreement, Executive
shall be entitled to four (4) weeks paid vacation per calendar year and any
vacation time not taken during any calendar year shall not be carried over into
subsequent calendar years.
6. EXPENSES. During the period of his employment, Executive shall be reimbursed
for his business-related expenses incurred on behalf of the Company in
accordance with the travel and entertainment expense policy of the Company as
adopted by the Board of Directors from time to time and in effect at the time
the expense was incurred. Executive agrees to maintain such records and
documentation of all such expenses to be reimbursed by the Company hereunder as
the Company shall require and in such detail as the Company may reasonably
request.
7. TERMINATION. The term of Executive's employment under this Agreement may be
terminated prior to expiration of the term provided in Section 2 hereof in
accordance with the following paragraphs. Any termination of the Executive's
employment by the Company for Cause or otherwise shall be communicated by Notice
of Termination to the Executive given in accordance with Section 14 hereof. A
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date, which date shall not be more than sixty (60)
calendar days after the giving of such notice. The death or disability of
Executive shall in no event be deemed a termination of employment by Executive.
(a) MUTUAL. Executive's employment under this Agreement may be
terminated upon the mutual written agreement (which may include, if so agreed to
by the Board of Directors and Executive, severance payments and/or benefits) of
the Company and Executive.
(b) DEATH. In the event of the death of Executive, the Company
may terminate Executive's employment under this Agreement.
(c) DISABILITY. If, during Executive's employment under this
Agreement, Executive shall become disabled and unable to perform his duties as
required herein ("Disability") for a consecutive period of one hundred twenty
(120) days, then the Company may, upon thirty (30) days' written notice to
Executive, terminate Executive's employment under this Agreement.
(d) CAUSE. Executive's employment under this Agreement may be
terminated by the Company, with or without Cause as herein defined upon giving
Executive thirty (30) days written notice. For purposes of this Agreement, the
term "Cause" shall mean the termination of the Executive by the Board of
Directors of the Company as a result of the existence or occurrence of one or
more of the following conditions or events:
(i) An act or acts of fraud, misappropriation, or
embezzlement on the Executive's part that result in or are intended to result in
his personal enrichment at the expense of the Company or its subsidiaries or
affiliates.
(ii) Conviction of a felony involving moral turpitude
or violation of securities laws.
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(iii) The Executive's willful or intentional failure
to perform his duties as required under this Agreement; provided, that the
Company shall provide Executive with written notice of such failure and
Executive shall have ten (10) days from the date Executive receives such notice
to remedy such failure to perform.
(iv) Any material breach of the terms of this
Agreement by Executive.
(v) Substantial and continuing neglect or inattention
by Executive of or to the duties described in Section 3 hereof.
8. DEATH AND DISABILITY. In the event of the termination of Executive's
employment under this Agreement by reason of the Executive's death or
Disability, the Company shall pay Executive (or his heirs and/or personal
representatives) the payments and benefits indicated below:
(a) TERMINATION DUE TO DEATH. In the event of Executive's death, this
Agreement shall terminate immediately, and the Company shall pay to Executive's
estate or legal representative Executive's Base Compensation through the date of
Executive's death. Subject to Section 5(b), this Agreement does not obligate the
Company to make any other payment to Executive's estate or legal representative
in the event of the Executive's death.
(b) DISABILITY. In the event of Executive's Disability, from and after
the Disability Date, Executive shall receive, instead of his Base Compensation
or any other compensation payable by the Company under this Agreement, the
disability benefits to which Executive is entitled under any and all disability
benefit plans provided by or made available to Executive by the Company.
9. SEVERANCE. In the event of the termination of Executive's employment under
this Agreement for any reason other than Executive's death or disability, the
Company shall provide the payments and benefits to Executive as indicated below:
(a) WITH CAUSE OR VOLUNTARY RESIGNATION. If Executive is
terminated for Cause (as defined in Section 7(d) of this Agreement), or if
Executive voluntarily terminates his employment by the Company, the Company
shall pay Executive, within five (5) business days after the date of
termination, Executive's Base Compensation, unused vacation entitlement and all
expenses in connection with Executive's use of the automobile under Section 5(c)
hereof through such date of termination, and the Company shall have no further
obligation to provide compensation or benefits to Executive under this
Agreement; except that, to the extent that the Company's insurance, stock option
and other benefit plans provide certain rights and benefits after an employee's
termination, Executive may continue to receive such rights and benefits in
accordance with the terms of such plans.
(b) WITHOUT CAUSE. If terminated by the Company without Cause,
Executive shall receive the Base Compensation, Bonus Compensation, Annual Stock
Options, and the other benefits
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under this Agreement until the later to occur of the date twelve (12) months
from the date of such termination and the end of the term (or any renewal term)
of this Agreement.
10. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that he will
have access to certain confidential information of the Company and of
corporations with whom the Company does business, and that such information
constitutes valuable, special and unique property of the Company and such other
corporations. During the term of this Agreement and for a period of five (5)
years immediately following the date of termination of this Agreement, Executive
agrees not to disclose or use any confidential information, including without
limitation, information regarding research, developments, "know-how," prices,
suppliers, customers, costs or any knowledge or information with respect to
confidential or trade secrets of the Company, it being understood that such
confidential information does not include information that is publicly available
unless such information became publicly available as a result of a breach of
this Agreement. Executive acknowledges and agrees that all notes, records,
reports, sketches, plans, unpublished memoranda or other documents belonging to
the Company, but held by Executive, concerning any information relating to the
Company's business, whether confidential or not, are the property of the Company
and will be promptly delivered to it upon Executive's leaving the employ of the
Company. Executive also agrees to execute such confidentiality agreements that
the Board may adopt, and may modify from time to time, as a standard form to be
executed by all employees of the Company, to the extent such standard forms are
not materially more restrictive than the provisions of this Agreement.
11. INTELLECTUAL PROPERTY. Executive acknowledges and agrees that all
discoveries, inventions, designs, improvements, ideas, writings, copyrights,
publications, study protocols, study results, computer data or programs, or
other intellectual property, whether or not subject to patent or copyright laws,
which Executive shall conceive solely or jointly with others, in the course or
scope of his employment with the Company or in any way related to the Company's
business, whether during or after working hours, or with the use of the
Company's equipment, materials or facilities (collectively referred to herein as
"Intellectual Property"), shall be the sole and exclusive property of the
Company without further compensation to Executive. As used in this Section 11
and the following Section 12, it is understood that the Company's principal
"business" is providing IT consultant staffing and services. Executive shall
take such steps as are deemed necessary to maintain complete and current records
of the Intellectual Property conceived by the Executive, and Executive shall
assign to the Company or its designees, the entire right, title and interest in
said Intellectual Property.
12. NON-COMPETITION. Executive acknowledges that his services to be rendered
hereunder are of a special and unusual character that have a unique value to the
Company and the conduct of its business, the loss of which cannot adequately be
compensated by damages in an action at law. In view of the unique value to the
Company of the services of Executive for which the Company has contracted
hereunder, and because of the confidential information to be obtained by or
disclosed to Executive as herein above set forth, and as a material inducement
to the Company to enter into this Agreement and to pay and make available to
Executive the compensation and other benefits referred to herein, Executive
covenants and agrees that Executive will not, directly or indirectly, whether as
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principal, agent, trustee or through the agency of any corporation, partnership,
association or agent (other than as the holder of not more than 10% of the total
outstanding stock of any company the securities of which are traded on a regular
basis on recognized securities exchanges):
(a) while employed under this Agreement and for any period
during which Executive is receiving payments from the Company (pursuant to
Section 8 hereof) following a termination as a result of Employee's Disability,
(i) work for (in any capacity, including without limitation director, officer or
employee) any other business or IT staffing company that competes with the
Company and is located in the United States or within 50 miles of any branch
office of the Company, or (ii) recruit, or otherwise influence or attempt to
induce employees of the Company to leave the employment of the Company; and
(b) for the two-year period immediately following the
termination of this Agreement due to the expiration of the term of this
Agreement, termination of Executive for Cause, or Executive's voluntary
resignation; and for the two year period immediately following the last date on
which Employee shall receive payments from the Company pursuant to Section 8
hereof following a termination of employment as a result of Employee's
Disability, work for a company or business (in any capacity, including without
limitation as director, officer, or employee) that is in the business of
providing IT consultant staffing or services that competes with the Company and
is located in the United States or within 50 miles of any branch office of the
Company.
Executive has carefully read and considered the provisions of Sections
10, 11, and 12 hereof and agrees that the restrictions set forth in such
sections are fair and reasonable and are reasonably required for the protection
of the interests of the Company, its officers, directors, shareholders, and
other employees, for the protection of the business of the Company, and to
ensure that Executive devotes his full-time and efforts to the business of the
Company. Executive acknowledges that he is qualified to engage in businesses
other than those that are subject to this Section 12. It is the belief of the
parties, therefore, that the best protection that can be given to the Company
that does not in any way infringe upon the rights of Executive to engage in any
unrelated businesses is to provide for the restrictions described above. In view
of the substantial harm which would result from a breach by Executive of
Sections 10, 11 and 12, the parties agree that the restrictions contained
therein shall be enforced to the maximum extent permitted by law. In the event
that any of said restrictions shall be held unenforceable by any court of
competent jurisdiction, the parties hereto agree that it is their desire that
such court shall substitute a reasonable judicially enforceable limitation in
place of any limitation deemed unenforceable and that as so modified, the
covenant shall be as fully enforceable as if it had been set forth herein by the
parties.
13. REMEDIES. The provisions of sections 10, 11 and 12 of this Agreement shall
survive the termination of this Agreement as set forth therein, regardless of
the circumstances or reasons for such termination, and inure to the benefit of
the Company. The restrictions set forth in Sections 10, 11 and 12 are considered
to be reasonable for the purposes of protecting the business of the Company. The
Company and Executive acknowledge that the Company would be irreparably harmed
and that monetary damages would not provide an adequate remedy to the Company if
the covenants contained
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in Sections 10, 11 and 12 were not complied with in accordance with their terms.
Accordingly, Executive agrees that the Company shall be entitled to injunctive
and other equitable relief to secure the enforcement of these provisions, in
addition to any other remedy which may be available to the Company, and that the
Company shall be entitled to receive from Executive reimbursement for reasonable
attorneys' fees and expenses incurred by the Company in enforcing these
provisions.
14. NOTICES. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by registered mail to the
addresses below or to such other address as either party shall designate by
written notice to the other:
IF TO THE EXECUTIVE: To the address set forth below his signature on
the signature page hereof.
IF TO THE COMPANY:
Technisource, Inc.
0000 X. Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attention: President
15. ENTIRE AGREEMENT; MODIFICATION.
(a) This Agreement contains the entire agreement of the
Company and Executive, and the Company and Executive hereby acknowledge and
agree that this Agreement supersedes any prior statements, writings, promises,
understandings or commitments.
(b) No future oral statements, promises or commitments with
respect to the subject matter hereof, or other purported modification hereof,
shall be binding upon the parties hereto unless the same is reduced to writing
and signed by each party hereto.
16. ASSIGNMENT. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company. The Executive may not assign his rights and obligations
under this Agreement.
17. FULL SETTLEMENT. The Executive shall not be obligated to seek other
employment by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement. The amounts payable to Executive under
this Agreement shall not be reduced by any compensation payable to Executive
from employment by another employer after the date of Executive's termination
provided such employment does not violate the terms of Section 12 hereof. The
Company agrees to pay all legal fees and expenses which the Executive may
reasonably incur as a result of any contest by the Executive or the Company or
others of the validity or enforceability of, or liability under any provision of
this Agreement or any guarantee of performance thereof, in each case plus
interest, provided that the Executive is the prevailing party in any such
contest. If the
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Executive is not the prevailing party each party shall pay its own legal fees
and expenses except that if such contest is the result of a claimed breach of
Section 10, 11 or 12, and the Company shall be the prevailing party, the
Executive shall pay the reasonable legal fees and expenses of the Company. The
determination of the prevailing party in any contest shall be made by the
tribunal which shall resolve such contest, or by the parties if such contest is
settled without resort to any such tribunal.
18. MISCELLANEOUS.
(a) This agreement shall be subject to and governed by the
laws of the State of Florida, without regard to the conflicts of laws principles
thereof.
(b) The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or the interpretation
of this Agreement.
(c) The failure of any party to enforce any provision of this
Agreement shall in no manner affect the right to enforce the same, and the
waiver by any party of any breach of any provision of this Agreement shall not
be construed to be a waiver by such party of any succeeding breach of such
provision or a waiver by such party of any breach of any other provision.
(d) All written notices required in this Agreement shall be
sent postage prepaid by certified or registered mail, return receipt requested.
(e) In the event any one or more of the provisions of this
Agreement shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, and enforceable provision which comes closest to the intent of the
parties.
(f) This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the day and year first above written.
TECHNISOURCE, INC., a Florida corporation
By: /S/ XXXXXX X. XXXXXXX
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Its: President
/S/ XXXX XXXXX
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Xxxx Xxxxx
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