EXHIBIT 2.5
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is effective as
of the 1st day of October, 2003 (the "Effective Date"), by and between Fortune
Diversified Industries, Inc., a Delaware corporation (the "Company"), and Xxxxxx
X. Xxxxxxx (the "Executive").
Recital
The Company has determined that it is in the best interests of the
Company to obtain the benefit of the Executive's services, experience and
loyalty, and the Executive desires to provide his services and experience and
devote his loyalty to the Company upon the terms and conditions set forth in
this Agreement.
Agreement
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Employment and Duties.
(a) General. The Executive shall serve as the
Chief Operating Officer of the Company. The Executive shall, to the best of his
abilities, perform the duties of such office and such additional administrative
and executive duties as the Board of Directors (the "Board") or Chairman of the
Company assigns to him from time to time. The principal location at which the
Executive's services are to be performed is Richmond, Indiana.
(b) Employment Duties. Throughout the
"Employment Term," as defined in Section 2, the Executive shall: (i) devote his
working hours, on a full-time basis (as defined below) to his duties under this
Agreement, subject to the Executive's service to certain of Company's
subsidiaries; (ii) faithfully and loyally serve the Company; (iii) comply in all
respects with the lawful and reasonable directions and instructions given to him
by the Board of the Company; and (iv) use his best efforts to promote and serve
the interests of the Company. For the purposes of this Agreement, the term
"full-time basis" shall be interpreted as the amount of time and level of
commitment necessary, as determined by the Board of the Company in accordance
with reasonable and customary standards to perform the duties associated with
the Executive's position with the Company.
(c) Exclusive Employment. Throughout the
Employment Term and subject to the Executive's service to certain of Company's
subsidiaries, the Executive shall not render his services, directly or
indirectly, for compensation, to any other person or organization without the
prior written consent of the Board, nor shall the Executive engage in any
activity which would interfere significantly with the faithful performance of
his duties under this Agreement. Without limiting the generality of the
foregoing, the Executive may perform minor services provided that the services
do not contravene or conflict with the provisions of Section 1(b) or Section 5
through Section 7 of this Agreement.
Section 2. Employment Term. The Executive's employment commences on the
Effective Date and continues until September 30, 2006 unless the Executive's
employment is terminated, as provided in Section 4 of this Agreement (the
"Initial Term"). After the expiration of the Initial Term, the Executive's
employment may, by written mutual consent of the Company and the Executive, be
renewed for additional two (2) year periods, or for such other period as the
parties may agree, which such periods shall be governed by the terms and
conditions of this Agreement (each a "Renewed Term"). The Initial Term and the
Renewed Terms are collectively referred to as the "Employment Term."
Section 3. Compensation and Other Benefits. The Company shall pay and
provide the following compensation and other benefits to the Executive as
compensation for services rendered under this Agreement:
(a) Annual Salary. During the Employment Term, the Executive shall earn an
annual salary of One Hundred Twenty Thousand Dollars ($120,000) per full year
(the "Annual Salary"), less applicable payroll deductions for the services
provided under this Agreement. The Annual Salary may be increased during each
calendar year during the Employment Term in an amount deemed appropriate by the
Board of the Company. For the purpose of coordinating benefit plans and other
practical considerations, the Annual Salary shall be paid by Professional Staff
Management, Inc., a wholly-owned subsidiary of Company ("PSM"). Such expense
shall be allocated back via intercompany to Company.
(b) Employee Benefit Plans. During the Employment Term, the Executive shall be
entitled to participate in any employee retirement and other benefit plans and
programs sponsored by PSM and as more fully described in the Executive
Employment Agreement by and among Professional Staff Management, Inc.,
Professional Staff Management, Inc., II, Pro Staff, Inc. and the Executive dated
the same date hereof ("Executive Employment Agreement (PSM)")
(c) Paid Time Off. During the Employment Term, the Executive shall be entitled
to the amount of Paid Time Off ("PTO") as more fully described in the Executive
Employment Agreement (PSM).
(d) Leave of Absence. Sick leave, holiday pay and all other leaves of absence
will be in accordance with the terms of the Executive Employment Agreement
(PSM).
(e) Other Compensation. The Executive shall be and remain eligible to
participate in, in accordance with their respective terms and conditions, all
benefit plans sponsored by PSM and as more fully described in the Executive
Employment Agreement (PSM).
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Section 4. Termination of Employment.
(a) General. Prior to the expiration of the Employment Term, the Executive's
employment may be terminated for any of the following reasons: (1) termination
for cause, (2) termination without cause by the Company, (3) death, or (4)
disability. If the Company desires to terminate the Executive's employment, the
Company shall provide the Executive with written notice of the Company's intent
to terminate the Executive (the "Termination Notice"). The effective date of the
Executive's termination shall be specified in the Termination Notice (the
"Termination Date").
(b) Termination for Cause.
(1) If, prior to the expiration of the Employment Term, the Board
of the Company terminates the Executive's employment for
"Cause" (as defined in Section 4(b)(2)), the Executive shall
be entitled to payment of that portion of the Executive's
Annual Salary and other forms of compensation under Section 3
that the Executive earned through and including the
Termination Date.
(2) Termination for "Cause" shall mean termination by the Board of
the Executive's employment with the Company for any one or
more of the following reasons:
(i) Any intentional, wanton, or reckless act or omission that
constitutes a breach by the Executive of his obligations under
this Agreement, fiduciary obligations or any failure by the
Executive to perform the duties or to serve the Company in the
capacities prescribed by the Board of the Company in
accordance with Section 1 which: a) if the act or omission is
reasonably capable of being corrected within a thirty (30) day
period, the Executive fails to correct the act or omission
within thirty (30) days after written notice thereof, or b) if
the act or omission is not reasonably capable of being
corrected within a thirty (30) day period, the thirty (30) day
correction period shall not be applicable.
(ii) The Executive's embezzlement of funds or misappropriation of
assets of the Company, the commitment of any act of moral
turpitude, conviction of or a plea of guilty or no contest to
a felony, engaging in any activity involving dishonesty,
fraud, breach of fiduciary duty, or engaging in any public
conduct that has a material adverse effect on the Company;
(iii) Any continued or repeated failure or refusal after receipt of
written notice by the Executive to comply with all material
policies, rules and regulations of the Company, whether now in
force or hereafter adopted.
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(3) If the Executive is terminated for "Cause," the effective date
of the Executive's termination specified in the Termination
Notice shall be the date on which the Executive receives the
Termination Notice.
(c) Termination Without Cause by the Company. If prior to the expiration of the
Employment Term, the Board of the Company desires to terminate the Executive's
employment, the Board may, in its sole and absolute discretion, terminate the
Executive's employment with the Company at any time without Cause, by providing
a Termination Notice to the Executive at least seven (7) days prior to the
Termination Date. If the Company terminates the Executive as provided in this
Section 4(c), the Company shall pay to the Executive the equivalent of
one-twelfth of his Annual Salary (in effect on the Termination Date) per month
(or a prorata portion thereof for a partial month), in accordance with the
standard payroll practices of the Company, until the expiration of the
Employment Term and provide the Executive with the health and welfare benefits
described in Section 3(b) (or the cash equivalent of the Company contribution
thereto, if according to the health and welfare benefit plan, the Executive can
no longer participate once that Executive is terminated) throughout the period
beginning on the Termination Date and ending upon the expiration of the
Employment Term so long as the Executive makes any required employee
contributions therefor. If the Executive dies or becomes Permanently Disabled
(as defined below) subsequent to the Termination Date, the payments required by
this Section 3(c) shall continue.
(d) Death. If the Executive dies prior to the expiration of the Employment Term
or the Executive is entitled to receive payments from the Company pursuant to
Section 4(b)(1) at the time of his death, the Executive's estate or personal
representative shall be entitled to receive that portion of the Annual Salary
that the Executive earned through and including the date of the Executive's
death or in the case of earlier termination with Cause, the Termination Date.
(e) Disability. The Executive shall be deemed "Permanently Disabled" when he is
deemed permanently disabled in accordance with the disability insurance policy
of the Company in effect at the time of the illness or injury causing the
disability, or in the event no disability policy is then in effect, in
accordance with the determination of a physician mutually selected by the
Executive and the Board of Directors of the Company. If prior to the expiration
of the Employment Term, the Executive becomes "Permanently Disabled," the Board
may terminate the Executive's employment with the Company by providing written
notice to the Executive at least seventy-two (72) hours prior to the Termination
Date. If the Executive resigns from employment with the Company as a result of a
Permanent Disability or the Company terminates the Executive's employment as a
result of a Permanent Disability, the Executive shall be entitled to receive
that portion of the Annual Salary that he earned through and including the
Termination Date. In addition, the Executive shall be entitled to receive any
benefits then due and payable pursuant to any benefit plan or compensation
arrangement maintained by the Company and with respect to which the Executive is
a participant, and the Executive's participation in such benefit plans shall be
continued throughout the period during which the Executive is entitled to
receive a portion of the Annual Salary pursuant to this Section 4.
Notwithstanding the above, the Company shall be obligated to comply with the
Americans with Disabilities Act, or other applicable law.
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(f) Termination by the Executive. On the Effective Date, the Executive also
executed an Executive Employment Agreement with certain subsidiaries of Fortune
Diversified Industries, Inc. If prior to the expiration of the Employment Term,
the subsidiaries of Fortune Diversified Industries, Inc. terminate the
Executive's employment, the Executive may, in his sole discretion, terminate
this Agreement. In addition, the Executive may terminate this Agreement for any
of the following reasons: (i) a material breach of this Agreement by the Company
and such breach is not cured by the Company within thirty (30) days of receipt
of a written notice from Employee; (ii) Company changing the principal location
at which the Executive's services are performed without the Executive's prior
written consent; (iii) Company materially increasing Executive's
responsibilities or duties under Section 1 without Executive's prior written
consent; or (iv) Company causing the Executive to serve in a capacity other than
a managerial capacity without the Executive's prior written consent. Any
termination by the Executive pursuant to this Section 4(f) shall be deemed to be
a termination of the Executive without cause pursuant to Section 4(c).
Section 5. Secrecy and Confidential Information.
(a) Confidential Information. "Confidential
Information" shall mean all information, whether or not originated by the
Executive, which is (i) used in the business of the Company and is proprietary
to, about, or created by the Company; (ii) designated as confidential by the
Company; or (iii) not generally known by any non-Company personnel. Confidential
Information includes, but is not limited to, the following types of information
(whether or not reduced to writing or designated as confidential):
(1) Identifying information regarding the
Company's customers, clients and their
representatives, contracts (contents and
parties), client services, data provided by
clients, and the type, quantity and
specifications of products and services to
be developed, being developed, being sold
to, purchased, leased, licensed or received
by clients of the Company;
(2) Work product resulting from or related
to work or projects performed by or to be
performed for the Company or for clients or
customers of the Company, including but not
limited to programs, source code, object
code, data base structures and
interrelationships and arrangements,
inventions, formulas, sketches, drawings,
designs, developments, discoveries,
improvements, applications, know-how,
interim and final lines of inquiry,
hypotheses, research, reports, ideas and
conclusions related thereto and the methods,
processes, procedures, analysis and
techniques used in connection therewith;
(3) The Company's internal personnel and
financial information (including the
revenue, costs or profits associated with
the Company's products); vendor and supplier
names, payroll information, purchasing and
internal cost information, internal service
and operational manuals and other
information of the Company; and the manner
and methods of conducting the Company's
businesses;
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(4) Information with respect to the
Company's products, facilities and methods,
systems, trade secrets and other
intellectual property;
(5) Marketing and developmental plans, price
and cost data, price and fee amounts,
pricing and billing policies, quoting
procedures, marketing techniques, methods of
obtaining business, forecasts, forecast
assumptions and volumes, future plans and
potential strategies of the Company;
(6) Any other information relating to the
Company which may have been obtained by the
Executive during his employment by the
Company and which is generally not known by
members of the general public without breach
of this Agreement by the Executive.
(7) Confidential Information does not
include any information which: a) is in the
public domain on the Effective Date; b)
enters the public domain through no fault of
the Executive; or c) is rightfully
communicated by a third party to the
Executive free of any obligation of
confidence.
(b) Ownership of Confidential Information.
The Executive recognizes that the services he will perform under
this Agreement are special, unique and extraordinary and that, by reason of his
employment under this Agreement, he may acquire Confidential Information. The
Executive hereby acknowledges and agrees that all Confidential Information is
and shall remain the exclusive property of the Company, whether or not prepared
in whole or in part by the Executive and whether or not disclosed to or
entrusted to the custody of the Executive. Upon the termination of his
employment with the Company, or upon the request of the Company, at any time,
the Executive shall promptly deliver to the Company all documents, tapes, disks,
or other storage media and any other materials, and all copies thereof in
whatever form, in the possession of the Executive pertaining to the business of
the Company, including, but not limited to, any containing Confidential
Information.
Section 6. Non-Disclosure and Non-Use of Confidential Information. In
furtherance of this Agreement and in order to assure adequate protection of the
Company against the wrongful use or disclosure of Confidential Information, the
Executive agrees that he will hold all Confidential Information of the Company
in strict confidence and solely for the benefit of the Company, and that, except
as necessary to perform his obligations to the Company under this Agreement or
with the prior written consent of the Board, he will not directly or indirectly
disclose or use or authorize any third party to disclose or use any Confidential
Information. Notwithstanding the preceding sentence, the Executive may disclose,
to the limited extent necessary, Confidential Information in an action to
enforce the terms of this Agreement. Prior to any disclosure which the Executive
makes by operation of law or lawfully issued subpoena,
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he will provide prior written notice to the Company as far in advance as
possible in order to permit the Company to object to such disclosure or file a
motion to quash any subpoena. The Executive understands and agrees that any
violation of this Section 6 while employed by the Company may result in
immediate disciplinary action by the Company, including termination of
employment pursuant to Section 4(b)(2).
Section 7. Intellectual Property.
(a) Acknowledgment of Company Ownership. If the Executive as part of his
activities on behalf of the Company generates, authors or contributes to any
invention, design, new development, device, product, method or process (whether
or not patentable or reduced to practice or constituting Confidential
Information), any copyrightable work (whether or not constituting Confidential
Information) or any other form of Confidential Information relating directly or
indirectly to the Company's businesses as now or hereafter conducted
(collectively, "Intellectual Property"), the Executive acknowledges that such
Intellectual Property is the exclusive property of the Company and hereby
assigns all right, title and interest in and to such Intellectual Property to
the Company. Any copyrightable work prepared in whole or in part by the
Executive will be deemed "a work made for hire" under Section 201(b) of the 1976
Copyright Act, and the Company shall own all of the rights comprised by the
copyright therein. The Executive shall promptly and fully disclose all
Intellectual Property to the Company and shall cooperate with the Company to
protect the Company's interests in and rights to such Intellectual Property
(including, without limitation, providing reasonable assistance in securing
patent protection and copyright registrations and executing all documents as
reasonably requested by the Company, whether such requests occur prior to or
after the termination of the Executive's employment with the Company).
(b) Delivery of Materials upon Termination of Employment. As requested by the
Company from time to time and upon the termination of the Executive's employment
with the Company for any reason, the Executive shall promptly deliver to the
Company all copies and embodiments, in whatever form, of all Intellectual
Property in the Executive's possession or within his control (including, but not
limited to, written records, notes, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing or constituting Intellectual Property)
irrespective of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
Section 8. Injunctive Relief/Remedies. The parties hereto hereby
acknowledge and agree that: (i) the Company would be irreparably injured in the
event of a breach or threatened breach by the Executive of his obligations
contained in Section 5 through Section 7; (ii) monetary damages would not be an
adequate remedy for such breach; and (iii) the Company shall be entitled to
injunctive relief, in addition to any other remedy which it may have, in the
event of such breach. Injunctive relief shall include, but not be limited to, a
temporary restraining order and/or a preliminary or permanent injunction to
restrain or enjoin any violation or threatened violation of this Agreement. The
Company shall be entitled to immediate injunctive relief without notice and
without the posting of any bond. The parties hereto hereby acknowledge that, in
addition to any other rights and remedies the Company may have under
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Section 8 hereof, the Company shall have the right and remedy to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits (collectively, "Benefits")
derived or received by the Executive as the result of any transactions
constituting a breach of the provisions of Section 5 through Section 7, and the
Executive hereby agrees to account for and pay over such Benefits to the
Company. In addition, the Company shall be entitled to recover from the
Executive all costs, expenses, and reasonable attorneys' fees incurred by the
Company in seeking either enforcement of this Agreement or damages for its
breach, or in defending any action brought by the Executive to challenge or
construe the terms of this Agreement. Furthermore, the Company shall also be
entitled to recover prejudgment interest on all amounts recovered in the amount
of ten percent (10%) per annum. Each of the rights and remedies enumerated in
this Section 8 shall be independent of the other, and shall be severally
enforceable, and all of such rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or in equity. It is the intent of the parties hereto that the restrictions and
covenants contained in Section 5 through Section 7 shall be enforced to the
fullest extent permissible under the laws and public policies jurisdiction in
which enforcement is sought (the Executive hereby acknowledging that said
restrictions are reasonably necessary for the protection of the Company).
Accordingly, it is hereby agreed that if any of the provisions of Section 5
through Section 7 shall be adjudicated to be invalid or unenforceable for any
reason whatsoever, said provision shall be (only with respect to the operation
thereof in the particular jurisdiction in which such adjudication is made)
construed by limiting and reducing it so as to be enforceable to the extent
permissible, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of said provision in any other
jurisdiction. The parties agree that if the Executive has violated any of the
restrictions or covenants in Section 5 through Section 7, or if there is a basis
for the granting of injunctive relief in accordance with the terms of this
Agreement, then the period of all of the restrictions and covenants set forth in
Section 5 through Section 7 automatically shall be extended by the number of
days during which: (i) the Executive was in violation of such restriction or
covenant; or (ii) such a basis for the granting of injunctive relief existed,
whichever period is longer. The Executive agrees to provide a copy of this
Agreement to any person or entity that employs or attempts to employ him during
the term of this Agreement.
Section 9. Executive Warranties. The Executive represents and warrants
that his employment by the Company and his execution and performance of this
Agreement do not and will not violate any express or implied obligation to any
former employer or other party. The Executive further represents that he has not
brought with him and will not use or disclose during his employment with the
Company any information, documents, or materials subject to any legally
enforceable restrictions or obligations as to confidentiality or secrecy.
Section 10. Nonassignability.
(a) By the Executive. The Executive shall not
assign or delegate this Agreement or any other right, duty, obligation, or
interest under this Agreement without the Company's prior written consent;
provided, however, that nothing shall preclude the Executive from designating
beneficiaries to receive benefits payable under this Agreement upon his death,
and nothing shall preclude the Executive's executors, administrators or their
legal representatives, from assigning any rights under this Agreement to any
person.
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(b) By the Company. The Company may assign,
delegate, or transfer this Agreement and all of the Company's rights and
obligations under this Agreement to any of its subsidiaries or to any business
entity that by merger, consolidation, or otherwise acquires all or substantially
all of the assets of the Company or to which the Company transfers all or
substantially all of its assets. Upon assignment, delegation or transfer, any
affiliate, subsidiary, or business entity related to the Company shall be deemed
to be substituted for the Company for all purposes of this Agreement.
(c) Binding Effect. Except as limited under
Section 10(a) and Section 10(b), this Agreement shall be binding upon and inure
to the benefit of the parties hereto, any successors or assigns of the Company,
and the Executive's heirs and the personal representatives or executor of the
Executive's estate.
Section 11. Severability. Except as otherwise provided in Section 8
herein, if a court of competent jurisdiction makes a final determination that
any term or provision of this Agreement is invalid or unenforceable, and all
rights to appeal the determination have been exhausted or the period of time
during which any appeal of the determination may be perfected has been
exhausted, then so long as the partial invalidity does not cause this Agreement
to fail its essential purpose, the remaining terms and provisions shall be
unimpaired and the invalid or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and enforceable and that most
closely approximates the intention of the parties with respect to the invalid or
unenforceable term or provision, as evidenced by the remaining valid and
enforceable terms and conditions of this Agreement.
Section 12. Amendment. This Agreement may not be modified, amended, or
waived in any manner except by an instrument in writing signed by all parties to
this Agreement; provided, however, that the Board of the Company shall have
previously approved the Company's agreement to any modification, amendment or
waiver.
Section 13. Waiver. The waiver by any party of compliance by any other
party with any provision of this Agreement shall not operate or be construed as
a waiver of any other provision of this Agreement (whether or not similar), or a
continuing waiver or a waiver of any subsequent breach by a party of a provision
of this Agreement. Performance by any party of any act not required of it under
the terms and conditions of this Agreement shall not constitute a waiver of the
limitations on its obligations under this Agreement, and no performance shall
estop that party from asserting those limitations as to any further or future
performance of its obligations.
Section 14. Claims by Executive. Any claim or cause of action by the
Executive against the Company shall not constitute a defense to the enforcement
of the restrictions and covenants set forth in this Agreement and shall not be
used to prohibit injunctive relief.
Section 15. Governing Law and Jurisdiction. The laws of the State of
Indiana shall govern the validity, performance, enforcement, interpretation and
any other aspect of this Agreement, notwithstanding any state's choice of law
provisions to the contrary. The parties
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intend the provisions of this Agreement to supplement, but not displace, their
respective rights and responsibilities under the Indiana Trade Secrets Act, IC
Section 24-2-3-1 et seq., as amended. The parties to this Agreement irrevocably
consent to the jurisdiction and venue of the courts of Xxxxxx County in the
State of Indiana and the United States District Court for the Southern District
of Indiana with respect to any and all actions related to this Agreement or the
enforcement of this Agreement, and the parties to this Agreement hereby
irrevocably waive any and all objections thereto.
Section 16. Notices. All notices required or desired to be given under
this Agreement shall be in writing and shall be deemed to have been duly given
(i) on the date of service if served personally on the party to whom notice is
to be given, (ii) on the date of receipt by the party to whom notice is to be
given if transmitted to such party by facsimile, provided a copy is mailed as
set forth below on the date of transmission, or (iii) on the third day after
mailing if mailed to the party to whom notice is to be given by registered or
certified mail, return receipt requested, postage prepaid, to the following
addresses:
(a) If to the Company, to:
Carter Fortune
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
(b) If to the Executive, to such address for
the Executive as is last shown on the payroll records of the Company.
Either party may, by giving written notice to the other party, change the
address to which notice shall then be sent.
Section 17. Prior Agreements. This Agreement is a complete and total
integration of the understanding of the parties with respect to the subject
matter of this Agreement. This Agreement supersedes all prior negotiations,
commitments, agreements, writings and discussions with respect to the subject
matter of this Agreement and any other agreement between the parties relating to
employment, and all prior negotiations, commitments, writings, and discussions
will have no force or effect.
Section 18. Headings. The subject headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction of this
Agreement.
Section 19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which for all purposes shall be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
counterpart signed by the party against which enforceability is sought needs to
be produced to evidence the existence of this Agreement.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date set forth above.
"Company" "Executive"
Fortune Diversified Industries, Inc.
By: ____________________________ ________________________________
Xxxxxx X. Xxxxxxx, CEO Xxxxxx X. Xxxxxxx
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