EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made effective as of this
30th day of April, 1999 by and between EMPLOYEE SOLUTIONS, INC., an Arizona
corporation (the "Company"), and XXX X. XXXXXX ("Employee").
RECITALS
A. The Company wishes to employ Employee, and Employee wishes to be
employed by the Company.
B. The parties wish to set forth in this Agreement the terms and conditions
of such employment.
AGREEMENTS
In consideration of the mutual promises and covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement, the
Company employs Employee to serve in an executive capacity and Employee accepts
such employment and agrees to dedicate all of his business time and effort to
Company business and perform such reasonable responsibilities and duties as may
be assigned to him from time to time by the Company's President, Board of
Directors (the "Board"), Chairman of the Board or Chief Executive Officer.
Employee's title shall be Senior Vice President - Sales, with responsibility for
the sales operations of the Company and its subsidiaries, including, but not
limited to, supervision and direction of the Company's sales force, and such
other executive responsibilities as may be assigned from time to time by, and
subject to the direction of, the Company's President, Board, Chairman of the
Board or Chief Executive Officer. Employee's title may be changed by Company,
from time to time, in Company's sole discretion, so long as such title
realistically reflects Employee's responsibilities and Employee is maintained in
an executive capacity. Employee shall have all power and authority of a
corporate officer as provided by the Company's bylaws. Employee shall report to
the President or Chief Executive Officer of the Company.
2. TERM. The employment of Employee by the Company pursuant to this
Agreement shall commence on the date hereof and continue for a term of three
years or until terminated as provided elsewhere herein.
3. COMPENSATION.
a. SALARY. The initial monthly base salary payable to Employee shall
be $16,667, which base salary shall be paid according to the Company's normal
payroll practices and shall be reviewed at least annually in accordance with the
Company's policies and practices regarding periodic review and adjustment of
executive compensation. Employee's base salary shall not be reduced during the
term hereof without Employee's written consent.
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b. INCENTIVE PLAN. During the term of this Agreement, Employee shall
be entitled to receive 15% of amounts paid from commission pool(s) available to
employees and independent sales agents of the Company that are established from
time to time in the Company's discretion with respect to national or other
large-group accounts that are developed by Employee or Employee's reports after
the commencement date of this Agreement and designated by the Company in its
discretion as national accounts. This incentive plan may be modified by the
Company in its discretion after the second anniversary of the effective date of
this Agreement, provided that the Company shall consult with Employee in
developing any such modification.
4. FRINGE BENEFITS. In addition to the options for shares of the Company's
Common Stock available to Employee under the same terms as those available to
Company employees, and any other employee benefit plans generally available to
Company employees, the Company shall include Employee (and Employee's
dependents) in any group medical insurance plan maintained for the employees of
the Company at the Company's expense. The manner of implementation of such
benefits with respect to such items as procedures and amounts is discretionary
with the Company but shall be equivalent to benefits provided generally to
Senior Vice Presidents of the Company and shall include medical, dental and
hospital coverage for Employee and Employee's dependents who are eligible under
the applicable plans.
5. VACATION. Employee shall be entitled to vacation with pay in keeping
with Employee's established vacation practices, but in no event less than four
weeks per service anniversary year. In addition, Employee shall be entitled to
such holidays as the Company may approve for its executive personnel.
6. EXPENSE REIMBURSEMENT.
a. ONGOING EXPENSES. In addition to the compensation and benefits
provided above, the Company shall pay a $500 per month automobile allowance and
all other, non-automobile related, reasonable expenses of Employee incurred in
connection with the performance of Employee's duties and responsibilities to the
Company pursuant to this Agreement, upon submission of appropriate vouchers and
supporting documentation in accordance with the Company's usual and ordinary
practices, provided that such expenses are reasonable and necessary business
expenses of the Company. The Company shall pay Employee's reasonable cellular
telephone expenses that are related to Company business and the cost of a phone
line at Employee's residence to be dedicated to use for Company business. In its
discretion and upon agreement of the parties, the Company may reimburse
job-related training or education expenses of Employee.
b. RELOCATION EXPENSES. The Company shall reimburse Employee's
reasonable expenses for packing, loading, storage, transportation, unloading and
unpacking of household goods from Employee's residence in San Diego to the
Phoenix metropolitan area, provided that Employee shall use one of two moving
companies designated by the Company. The Company also shall provide a taxable
lump sum payment of up to $36,000 for other relocation expenses, including
temporary living expenses, to be used in Employee's discretion.
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7. TERMINATION. This Agreement may be terminated in the manner provided
below:
a. FOR CAUSE. The Company may terminate Employee's employment by the
Company, for cause, upon written notice to the Employee stating the facts
constituting such cause, provided that Employee shall have 20 days following
such notice to cure any conduct or act, if curable, alleged to provide grounds
for termination for cause hereunder. In the event of termination for cause, the
Company shall be obligated to pay the Employee only the base salary due him
through the date of termination. Cause shall include willful and persistent
failure to abide by instructions or policies from or set by the Board of
Directors; willful and persistent failure to attend to material duties or
obligations imposed under this Agreement; commission of a felony, a misdemeanor
involving moral turpitude or any other serious misdemeanor offense or pleading
guilty or NOLO CONTENDERE to same; an act of fraud, dishonesty or theft on the
part of Employee; or any act or failure to act on the part of Employee, which
materially xxxxx or injures or may materially harm or injure the reputation,
good name or interests of Company (which shall include, to the extent allowed by
applicable law, but not be limited to, any drug, alcohol and/or any other
substance abuse which materially impairs the ability of Employee to perform his
duties and services hereunder).
b. DISABILITY. If Employee experiences a permanent disability (as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended),
the Company shall have the right to terminate this Agreement without further
obligation hereunder except for any amounts payable pursuant to disability plans
generally applicable to executive employees.
c. DEATH. If Employee dies, this Agreement shall terminate
immediately, and Employee's legal representative shall be entitled to receive
the base salary due to Employee through the 60th day from the date on which his
death shall have occurred and any other death benefits generally applicable to
executive employees.
d. TERMINATION WITHOUT CAUSE. Should the Company incur liability to
Employee as a result of terminating Employee's employment without cause, the
Company's liability to Employee in connection with such termination shall be as
follows: the minimum liability shall be equal to 3 months of Employee's
then-current base salary and the maximum liability shall be equal to 12 months
of Employee's then-current base salary; provided, however, that such salary
shall be paid under the normal payment schedule as if Employee were still
employed by Company and shall be reduced by applicable withholdings; and
provided further, that, immediately upon such termination, Employee shall use
reasonable efforts to obtain new employment at the earliest practicable time,
shall keep Company informed of his employment search progress and provide
Company with such information regarding same as Company shall request, and then,
upon the commencement of such new employment, Company's further liability to
Employee shall terminate, including, but not limited to, the obligation to make
further such payments of base salary.
e. TERMINATION BY EMPLOYEE. Employee may terminate his employment in
the event of a material breach of this Agreement by the Company, upon written
notice to the Employee stating the facts constituting such material breach,
provided that the Company shall have 30 days following such notice to cure any
conduct or act, if curable, alleged to provide grounds for termination for
material breach hereunder.
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8. RETURN OF THE COMPANY'S MATERIALS. Upon the termination of this
Agreement, Employee shall promptly return to the Company all files, credit
cards, keys, instruments, equipment, and other materials owned or provided by
the Company.
9. INSURANCE. The Company shall use commercially reasonable efforts to
carry director's and officer's professional liability insurance coverage for
Employee while in the performance of Employee's duties hereunder in an amount of
at least $10,000,000.
10. NON-DELEGABILITY OF EMPLOYEE'S RIGHTS AND COMPANY ASSIGNMENT RIGHTS.
The obligations, rights and benefits of Employee hereunder are personal and may
not be delegated, assigned, or transferred in any manner whatsoever, nor are
such obligations, rights or benefits subject to involuntary alienation,
assignment or transfer. The Company may transfer its obligations hereunder to a
subsidiary, affiliate or successor.
11. NOTICES. All notices, demands and communications required by this
Agreement shall be in writing and shall be deemed to have been given for all
purposes when sent to the respective addresses set forth below, (i) upon
personal delivery, (ii) one day after being sent, when sent by overnight courier
service to and from locations within the continental United States, (iii) three
days after posting when sent by registered, certified, or regular United States
mail, with postage prepaid and return receipt requested, or (iv) on the date of
transmission when sent by confirmed facsimile.
If to the Company: Employee Solutions, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Legal Department
If to Employee: Xxx X. Xxxxxx
c/o Employee Solutions, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
(Or when sent to such other address as any party shall specify by written notice
so given.)
12. ENTIRE AGREEMENT. This Agreement, together with the non-compete and
confidentiality agreement and the stock option grant letter, each dated as of
the same date as this Agreement (the "Other Agreements") constitutes the final
written expression of all of the agreements between the parties, and is a
complete and exclusive statement of those terms. It supersedes all
understandings and negotiations concerning the matters specified herein
(including all prior written employment agreements and arrangements, if any),
except as provided in the Other Agreements. Any representations, promises,
warranties or statements made by either party that differ in any way from the
terms of this written Agreement or the Other Agreements shall be given no force
or effect. Except as provided in the Other Agreements, the parties specifically
represent, each to the other, that there are no additional or supplemental
agreements between them related in any way to the matters herein contained
unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties.
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13. WAIVER. The waiver by either party of the breach of any covenant or
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
14. INVALIDITY OF ANY PROVISION. The provision of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Arizona exclusive of the
conflict of law provisions thereof. The parties agree that in the event of
litigation, venue shall lie exclusively in Maricopa County, Arizona.
16. HEADINGS; CONSTRUCTION. Headings in this Agreement are for
informational purposes only and shall not be used to construe the intent of this
Agreement. The language in all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning and not strictly for nor
against any party.
17. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same agreement.
Delivery by any party of a facsimile signature to the other parties to this
Agreement shall constitute effective delivery by said party of an original
counterpart signature to this Agreement.
18. BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
19. BINDING EFFECT ON MARITAL COMMUNITY. Employee represents and warrants
to the Company that he has the power to bind his marital community (if any) to
all terms and provisions of this agreement by his execution hereof.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Employment Agreement and caused the same to be duly delivered on its behalf as
of the date first above written.
EMPLOYEE SOLUTIONS, INC.,
an Arizona corporation
By:
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Its:
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"COMPANY"
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Xxx X. Xxxxxx
"EMPLOYEE"
