Exhibit 10.17
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of the 1st day of
December, 1997, by and between COMFORCE Corporation ("COMFORCE") a Delaware
corporation and COMFORCE Operating, Inc. ("COI"), a Delaware corporation that is
wholly-owned by COMFORCE, (COMFORCE and COI are collectively referred to as the
"Employer"), and Xxxxxxx Xxxxxxxxxx, a resident of the State of New York
("Employee").
RECITALS:
A. COMFORCE has employed Employee prior to the date hereof as an employee
and Employer wishes to employ Employee on and after the effective date hereof on
the terms and conditions hereof.
B. Employee is willing to continue employment with Employer on the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the promises and mutual obligations of
the parties contained herein, and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged the parties hereto agree as
follows:
1. Employment of Employee. Employer employs Employee, and Employee accepts
employment by Employer, during the "Term of Employment," as defined in Section 2
hereof, for the consideration and on the terms and conditions provided herein.
Employee shall be employed during the Term of Employment in such capacity or
capacities, and perform such duties, as may be determined from time to time by
each Employer's Board of Directors or any officer designated by the Board of
Directors as Employee's supervising officer (a "Supervising Officer"). COMFORCE
and COI shall allocate between each other the uses of Employee and costs
hereunder. To the extent there is a conflict between the requirements of
COMFORCE and COI, Employee shall follow the directions of, and be subject to the
ultimate control of, COMFORCE. Subject to this power of the Board of Directors
and Supervising Officer of Employer to designate the position in which Employee
shall serve Employer, Employee shall maintain the title and position of
President of Employer. Employee shall have full authority and responsibility to
undertake and carry out the functions and activities of that position in all
respects, subject only to the directions of, and policies established and
communicated to Employee from time to time by, the Board of Directors or
Supervising Officer.
2. Effective Date; Term of Employment. This Agreement shall commence and be
effective for all purposes as of the date first set forth above and shall remain
in effect, unless earlier terminated as provided in Section 7 hereof, until
November 30, 2000 (the "Initial Termination Date"), which date shall be extended
to the subsequent November 30 unless no less than sixty (60) days prior to the
Initial Termination Date or subsequent extension thereof, either
party has given the other written notice of termination hereof. The period
during which Employee is employed by Employer pursuant to this Agreement is
herein called the "Term of Employment."
3. Employee's Duties. During the Term of Employment, Employee shall: (i)
devote his full working time and attention to the business and affairs of
Employer and to the performance of his duties hereunder; (ii) serve Employer
faithfully and to the best of his ability, and use his best efforts to promote
the interests of Employer; and (iii) follow and implement the policies and
directions of the Board of Directors and Supervising Officer. Notwithstanding
the above, nothing contained in this Section 3 shall be deemed to prevent
Employee from engaging in activities relating to (a) the making of investments
for his own account or for the account of others, or (b) investment banking,
venture capital and finance activities, (c) serving as a member of the board of
directors of other corporations, or (d) engaging in charitable or public service
activities, provided that such investments, services and activities do not
interfere with Employee's performance of his duties hereunder.
Employee shall not be relocated from the Greater New York Metropolitan Area
without his prior consent.
4. Employee's Compensation.
(a) Base Salary. During the Term of Employment, as Employee's base
compensation for all services to be performed hereunder, Employer shall pay
Employee an annual salary of Two Hundred Thousand Dollars ($200,000) (the "Base
Salary"), payable in accordance with the Employer's payroll practices for its
officers. This base salary will increase annually during the Term of Employment
on each December 1, beginning December 1, 1998, by the greater of (i) seven
percent (7%) or (ii) a percentage equivalent to the percentage increase of (a)
the Price Index (as defined below) for the most recently available month at the
time of each such increase over (b) the Price Index reported for the same month
one year prior (such percentage increase calculated pursuant to this Section
4(a) is referred to herein as the "CPI Increase"). The Base Salary shall also be
increased from time to time at the discretion of the Board of Directors or any
committee thereof having authority over Employee's compensation to account for
material changes of circumstances of the Employer or of the responsibilities of
Employee.
For purposes of this Agreement, "Price Index" shall mean the United States
Department of Labor, Bureau of Labor Statistics, Consumer Price Index U.S. City
Averages, all Urban Consumers, All Items, 1982-84 = 100. If the manner in which
the Price Index as determined by the Department of Labor shall be substantially
revised, or if the 1982-84 average shall no longer be used as an index of 100,
an adjustment shall be made in such revised index so that the number used shall
be that which would have been obtained if the Price Index had not been so
revised, or if said average was still in use. If the Price Index shall become
unavailable for any reason whatsoever, the parties will substitute therefor a
comparable index based upon changes in the cost of living or purchasing power of
the consumer dollar published by any other governmental agency or, if no such
index shall then be available, a comparable index published by a major bank or
other financial institution.
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(b) Reimbursement of Expenses. It is recognized that during the Term of
Employment, Employee will be required to incur ordinary and necessary business
expenses in connection with the performance of his duties hereunder. Employer
shall pay or reimburse Employee promptly in the amount of al such expenses upon
presentation of itemized vouchers or other evidence of those expenditures in
accordance with Employer's policies and procedures.
(c) Automobile. It is recognized that the services to be performed by
Employee hereunder will require the use of a suitable automobile, and Employer
shall supply Employee with an automobile of Employee's choice at a cost to
Employer of no more than $650 per month. In the event that a Severance Payment
shall become due and payable under Section 7(c) hereof, Employer shall continue
to supply Employee with an automobile during the term of the Severance Payment.
In the event that a Termination Payment shall become payable under Section 7(d)
hereof, Employer shall transfer such automobile to Employee for the aggregate
consideration of $1.00 (if such automobile is leased by Employer, Employer shall
acquire such automobile prior to its transfer to Employee).
(d) Benefit Plans.
(i) Medical, Dental and Vision Benefits.
Employer agrees to reimburse Employee for all medical, dental, vision and
hospital expenses incurred by Employee for himself and for his wife and
dependent children during the Term of Employment and during the term of any
Severance Payment payable hereunder. These benefits may be provided in whole or
in part by an insurance plan; provided that Employer will reimburse Employee for
any such expenditure (1) in payment of any co-payment amount required to be paid
by Employee by any such insurance plan and (2) for any deductible amounts paid
by Employee.
(ii) Continuation of Salary During Disability.
If Employee becomes disabled during the Term of Employment because of
sickness, physical or mental disability, or for any other reason so that he is
unable to perform his duties hereunder, Employer agrees to continue Employee's
salary during such disability throughout the Term of Employment. These benefits
may be provided in whole or in part by a policy of disability insurance.
(iii) Benefit to Heirs Upon Death of Employee.
During the Term of Employment, Employer agrees to provide, at no cost to
Employee, life insurance benefits in the amount of Five Hundred Thousand Dollars
($500,000) for the benefit of beneficiaries designated by Employee, through the
purchase of a variable life insurance policy. In the event that a Termination
Payment or Severance Payment shall become payable under Section 7 hereof,
Employer shall (A) assign and transfer such policy to Employee and (B) pay all
premiums on such policy until the date payments are no longer required to be
made
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hereunder (in the event a Severance Payment is payable hereunder) or until the
third anniversary of the date of termination of employment (in the event of a
Termination Payment is payable hereunder).
(e) Bonus. In addition to Employee's compensation as provided herein,
Employer agrees to pay to Employee a bonus, in cash or in the common stock of
Employer, during the Term of Employment, in a sum to be determined by Employer's
Board of Directors based on achievement of corporate targets set in good faith
by the Board of Directors. The amount of such bonus shall not be decreased from
the highest amount of the bonus payable (the "Mandatory Bonus Amount") with
respect to the immediately preceding year based upon achievement of the prior
year's bonus targets set in good faith by the Board of Directors. Such bonus
shall be paid no less frequently than on an annual basis. The Board of Directors
may also in its discretion award additional discretionary bonuses which, unless
otherwise directed by the Board, will not be deemed to be added to or to
increase the Mandatory Bonus Amount.
(g) Fringe Benefits. Employee shall be entitled to participate in all other
fringe benefits generally offered by Employer to its employees during the Term
of Employment.
5. Employee's Vacation. Employee shall be entitled to four weeks paid
vacation per year during the Term of Employment.
6. Confidentiality; Business Opportunities.
(a) Confidentiality of Information. Employee recognizes and acknowledges
that the business interests of Employer require a confidential relationship
between Employer and Employee and the fullest protection and confidential
treatment of the financial data, lists of customers, lists of suppliers, special
agreements with suppliers, market information, marketing and/or promotional
techniques and methods, pricing information, purchase information, sales
policies, employee lists, policy and procedure manuals, books and publications,
records, advertising methods or schemes, computer records, trade secrets, know
how, plans and programs, sources of supply, and other knowledge of the business
of Employer (all of which are hereinafter jointly termed "Confidential
Information") which may in whole or in part be conceived, learned or obtained by
Employee in the course of Employee's employment with Employer. Accordingly,
Employee agrees to keep secret and treat as confidential all Confidential
Information whether or not copyrightable or patentable, and agrees not to use or
aid others is learning of or using any Confidential Information except in the
ordinary course of business and in furtherance of Employer's interests. During
the Term of Employment and at all times thereafter, except insofar as is
necessary disclosure consistent with Employer's business interests:
(i) Employee will not, directly or indirectly, disclose any
Confidential Information to others either within or outside of the business
of Employer;
(ii) Employee will not make copies of or otherwise disclose the
contents of documents containing disclosures of Confidential Information;
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(iii) As to documents which are delivered to Employee or which are
made available to him as a necessary part of the working relationships and
duties of Employee within the business of Employer, Employee will treat
such documents confidentially and will treat such documents as proprietary
and confidential, not to be reproduced, disclosed or used without
appropriate authority of Employer; and
(iv) Employee will not advise others that the information and/or know
how included in Confidential Information is known to or used by Employer or
Employee.
During the Term of Employment and at all times thereafter, Employee will
not in any manner disclose or use Confidential Information for Employee's own
account and will not aid, assist or abet others in the use of Confidential
Information for their account or benefit, or for the account or benefit of any
person or entity other than Employer.
Employee shall have no obligations with respect to Confidential Information
which at the time of disclosure is generally available to the public or with
respect to which disclosure is required by law.
(b) Confidentiality of Customers. Employee agrees that during the Term of
Employment and for a period ending two (2) years after termination of Employee's
employment with Employer, whether such termination is voluntary or involuntary
and irrespective of which party terminates and whether such termination is for
cause or not:
(i) Employee will not, directly or indirectly, make known or divulge
names, addresses or any information concerning the customers of Employer
existing at the time Employee entered the employ of Employer or of whom
Employee learned or with whom Employee became acquainted after entering the
employ of Employer, to any person, partnership, firm, company, corporation
or other entity; and
(ii) Employee will not, either directly or indirectly, either for
himself or for any other person, partnership, firm, company, corporation or
other entity, contact, solicit, purchase from, divert, or take away any of
the customers of Employer who were contacted, dealt with or solicited by
Employee or with whom Employee became acquainted, or of whom Employee
learned or obtained information about during the Term of Employment or
during the previous employment of Employee by Employer or any predecessor
in interest.
(c) Non-Interference with Contractual Relationships. Employee agrees that
during the Term of Employment and for a period ending two (2) years after
termination of Employee's employment with Employer, whether such termination is
voluntary or involuntary and irrespective of which party terminates and whether
such termination is for cause or not, Employee will not solicit, entice or
otherwise induce any employee of Employer to leave the employ of Employer for
any reason whatsoever; nor will Employee directly or indirectly aid, assist or
abet any other person or entity in soliciting or hiring any employee of
Employer, nor will Employee
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otherwise interfere with any contractual or other business relationships between
Employer and its employees.
(d) Disclosure of Business Opportunities. During the Term of Employment,
Employee agrees to promptly and fully disclose to Employer, and not to divert to
Employee's own use or benefit or the use or benefit of others, any business
opportunities involving any existing or prospective line of business, supplier,
product or activity of Employer or any business opportunities which otherwise
should rightfully be afforded to Employer.
(e) Should a court of competent jurisdiction determine that this Section 6
or any subsection hereof are otherwise unenforceable because one or all of them
are vague or over broad, the parties agree that these subsections may and shall
be enforced to the maximum extent permitted by law. It is the intent of the
parties that each of these subsections be a separate and distinct promise and
that unenforceability of any one subsection shall have no effect on the
enforceability of another.
(f) Employee agrees that should either party seek to enforce or determine
its rights through legal or judicial proceedings because of an act of the
Employee which the Employer believes to be in contravention of this Section 6
("Covenant"), the Covenant period shall be extended for a time period equal to
the period necessary to obtain judicial enforcement of the Employer's rights
hereunder.
(h) The parties agree that in the event of Employee's violation of this
Section 6 or any subsection thereunder, that the damage to the Employer will be
irreparable and that money damages will be difficult or impossible to ascertain.
Accordingly, in addition to whatever other remedies the Employer may have at law
or in equity, the Employee recognizes and agrees that the Employer shall be
entitled to a temporary restraining order and a temporary and permanent
injunction enjoining and prohibiting any acts not permissible pursuant to this
Section 6.
7. Termination of Agreement.
(a) Employer agrees not to terminate this Agreement except for "just
cause," and agrees to promptly give Employee written notice of its belief that
acts or events constituting "just cause" exist. Employee has the right to cure
within thirty (30) days of Employer's giving of such notice, the acts, events or
conditions which led to Employer's notice, but only if such acts are capable of
being cured. For purposes of this Agreement, "just cause" shall mean (i) the
willful failure to refusal of Employee to implement or follow the reasonable
written policies or directions of Employer's Board of Directors, provided that
Employee's failure or refusal is not based upon Employee's belief in good faith,
as expressed to Employer in writing, that the implementation thereof would be
unlawful; (ii) embezzlement; (iii) material violation of any of Employee's
covenants or agreements set forth in this Agreement due to Employee's
willfulness or gross negligence; and (iv) conviction of Employee of a felony
arising from an act or acts which
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result in material harm to Employer; provided, however, that after a Change of
Control, "just cause" shall only mean the events described in clauses (ii),
(iii) and (iv) of this sentence.
(b) Employer retains the right to discharge Employee for any reason not
specified above.
(c) Employer agrees that if prior to a Change of Control it discharges
Employee for any reason other than "just cause", Employee will be entitled to
full compensation, including participation in all benefit programs set forth in
Section 4 hereof, subject to the provisions of such Section 4, for one (1) year
(the "Severance Payment"). In addition, all stock options for the stock of
employer theretofore granted to Employee will become immediately exercisable and
will remain exercisable throughout the original term of such option,
notwithstanding any provision to the contrary regarding termination of
employment in the stock option agreement issued in respect of such stock option
or any other stock option plan of Employer pursuant to which such stock option
may have been granted.
(d) Employer agrees that if at any time within three (3) years following a
Change of Control it discharges Employee or refuses to extend the Term of
Employment for any reason other than "just cause", or if within one year after a
Change of Control Employee resigns from his employment with Employer for any
reason whatsoever,
i. The Employer will pay to Employee immediately after such termination
of employment a lump-sum cash payment equal to 300% of the aggregate
of (A) his then-current annual base salary (or, if his base salary has
been reduced at any time after the Change of Control, his base salary
in effect prior to the reduction), (B) the highest amount of cash
bonus paid to Employee during the three calendar years immediately
prior to the Change of Control, (C) the annual cost to the Employer of
any benefits, other than those provided for by Section 4(d)(iii), then
provided to Employee, included the cost of policies of insurance to
fully provide the benefits required to be provided under Section
4(d)(i) and Section 4(d)(ii) hereof, even if those benefits are in
whole or in part self-insured by Employer and (D) the amount
contributed by the Employer on behalf of the Employee for the calendar
year ending immediately prior to the termination to any pension plan
of the Employer.
ii. Employer shall pay to Employee an additional bonus immediately after
such termination of employment equal to the product of (A) the
exercise price(s) of all stock options for the stock of the Employer
granted to Employee not theretofore exercised multiplied by (B) the
number of such stock options to which such exercise price(s) relate,
increased to an amount equal to the product of (1) such bonus
multiplied by (2) the result of (x) one (1) divided by (y) one (1)
minus the maximum federal income tax rate for individuals
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in effect on the date of such payment (such methodology for
determining the increased amount referred to as the "Gross Up
Procedure").
iii. All of Employee's outstanding stock options, restricted shares and
other similar incentive interests and rights that have not vested or
been exercised will become immediately and fully vested and
exercisable and will remain exercisable throughout the original term
of such option, notwithstanding any provision to the contrary
regarding termination of employment in the stock option agreement
issued in respect of such stock option or any other stock option plan
of Employer pursuant to which such stock option may have been granted.
iv. Employee, together with his dependents, will continue following such
termination of employment to participate fully, with no contribution
to the cost required of him or them, in all accident and health plans
maintained or sponsored by the Employer immediately prior to the
Change of Control, or receive substantially the equivalent coverage
(or the full value thereof in cash) from the Employer, until the third
anniversary of such termination.
v. The Employer will promptly reimburse Employee for any and all legal
fees and expenses incurred by him as a result of such termination of
employment, including without limitation all fees and expenses
incurred in connection with efforts to enforce the provisions of this
Agreement.
All compensation received by Employee pursuant to this subsection is
collectively referred to herein as the "Termination Payment."
(c) In the event that Employee becomes entitled to a Termination Payment,
if any of the Termination Payment will be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"),
Employer shall pay to Employee an additional amount (the "Gross-up Payment")
such that the net amount retained by Employee, after deduction of Excise Tax on
the Termination Payment and any federal, state and local income tax and Excise
Tax upon the payment provided for by this Section, shall be equal to the
Termination Payment. For purposes of determining whether any of the Termination
Payment will be subject to the Excise Tax and the amount of such Excise Tax, (i)
any other payments or benefits received or to be received by Employee in
connection with the Change of Control of Employer or the termination of
Employee's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Employer, any person whose action
result in a Change of Control or any person affiliated with Employer or such
person) shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and "excess parachute payments" within the meaning of
Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel selected by Employer and acceptable to Employee such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent,
reasonable compensation for services actually
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rendered within the meaning of Section 280G(b)(4) of the Code, (ii) the amount
of Termination Payment which shall be treated as subject to the Excise tax shall
be equal to the lesser of (A) the total amount of the Termination Payment or (B)
the amount of excess parachute payments within the meaning of Section 280G(b)(1)
and (4) after applying clause (i) above, and (iii) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by Employer's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code. For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rates of taxation in the state and locality of Employee's residence on
the date of termination of Employee's employment, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state and
local taxes. In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time of the termination
of Employee's employment, Employee shall repay to Employer at the time that the
amount of such reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction plus interest on the amount of
such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of Employee's employment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), Employer shall make an additional gross-up
payment in respect of such excess (plus any interest payable with respect to
such excess) at the time that the amount of such excess is finally determined.
(d) For purposes of this Agreement, a "Change of Control" of Employer shall
be deemed to have occurred if
i. any individual, corporation, partnership, company, or other entity (a
"Person"), which term shall include a "group" (within the meaning of
section 13(d) of the Securities Exchange Act of 1934 (the "Act")) who
does not currently own directly or indirectly 20% or more of the
combined voting power of COMFORCE's outstanding securities becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act) of
securities of COMFORCE representing more than 20% of the combined
voting power of COMFORCE's then-outstanding securities.
ii. the stockholders of COMFORCE approve a merger or consolidation of
COMFORCE with any other corporation, other than a merger or
consolidation which would result in the voting securities of COMFORCE
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving entity) at least 80% of the combined voting power of
the voting securities of COMFORCE or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders
approve a plan of complete liquidation of COMFORCE or an agreement for
the sale or
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disposition by the Employer of all or substantially all of the
Employer's assets; PROVIDED, HOWEVER, that if the merger, plan of
liquidation or sale of substantially all assets is not consummated
following such stockholder approval and the transaction is abandoned,
then the Change of Control shall be deemed not to have occurred.
iii. the Board of Directors of COMFORCE ceases to consist of a majority of
Continuing Directors. For purposes hereof, "Continuing Director" shall
mean a member of the Board of Directors of COMFORCE who either (A) was
a member of the Board of Directors as of the date of this agreement or
(B) was nominated or appointed (before initial election as a director)
to serve as a director by a majority of the then Continuing Directors
and was approved in writing by Employee.
(e) Except as provided in Section 7(f), if Employee shall voluntarily cease
his employment with Employer for any reason prior to a Change of Control, all
compensation and benefits payable to Employee hereunder shall thereupon, without
further writing or act, cease, lapse and be terminated; provided, however, that
Employee may continue to receive benefits under any group health care insurance
plan, at Employee's expense, to the extent required by the Consolidated Omnibus
Budget Reconciliation Act of 1985. This paragraph (e) does not affect any rights
of Employee under any stock option agreements with Employer.
(f) In the event of the Bankruptcy (as defined below) of Employer, Employee
may at his option cease his employment hereunder, whereupon all of the
obligations of the parties hereto shall be terminated. For purposes of this
Agreement, "Bankruptcy" shall mean with respect to Employee, (i) the entry of a
decree or order for relief of either Employer by a court of competent
jurisdiction in any involuntary case involving the Employer under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (ii) the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar agent for either Employer or for any substantial
part of the Employer's assets or property; (iii) the filing with respect to
either Employer of a petition in any such involuntary bankruptcy case, which
petition remains undismissed for a period of ninety (90) days or which is
dismissed or suspended pursuant to Section 305 of the Federal Bankruptcy Code
(or any corresponding provision of any future United States bankruptcy law);
(iv) the commencement by either Employer of a voluntary case under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (v) the
consent by either Employer to the entry of an order for relief in an involuntary
case under any such law or to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar agent for the Employer or for any substantial part of the Employer's
asses or property; or (vi) the making by either Employer of any general
assignment for the benefit of creditors.
(g) In the event that Employee terminates his employment with Employer
prior to a Change of Control as a result of a material breach by Employer of its
obligations under this Agreement, which breach, if it is capable of being cured,
has not been cured within 30 days
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following receipt of written notice of such breach from Employee to Employer
(such notice and opportunity to cure to apply only if such breach is capable of
being cured), such termination shall be deemed for all purposes of this
Agreement as a termination of Employee's employment by Employer without "just
cause".
8. Indemnification and Insurance. In the event that during or after the
Term of Employment, Employee is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative ("proceeding"), by reason of the fact that he is
or was a director or officer, employee or agent of or is or was serving at the
request of Employer as a director or officer, employee or agent or another
corporation, or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a director,
officer, employee or agent, Employee shall be indemnified and held harmless by
Employer to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent such amendment permits Employer to provide
broader indemnification rights than said law permitted Employer to provide prior
to such amendment) against all expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by Employee in
connection therewith. Such right shall be a contract right and shall include the
right to be paid by Employer expenses incurred in defending any such proceeding
in advance of its final disposition; provided, however, that the payment of such
expenses incurred by Employee in his capacity as a director or officer (and not
in any other capacity in which service was or is rendered by Employee while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of such proceeding will be
made only upon delivery to Employer of an undertaking, by or on behalf of
Employee, to repay all amounts to so advanced if it should be determined
ultimately that Employee is not entitled to be indemnified under this section or
otherwise.
Employer agrees that it will maintain Directors and Officers Insurance
during the Term of Employment and for a period of three (3) years thereafter
covering Employee and the other officers and directors of Employer in the amount
of not less than Six Million Dollars ($6,000,000). In the event that such
Directors and Officers Insurance is not commercially available to Employer,
Employer will create a self-insurance reserve for all liabilities which would
otherwise be covered by Directors and Officers Insurance in the amount of Six
Million Dollars ($6,000,000), which reserve shall be maintained in a separate
escrow account and used exclusively for payment of liabilities, judgments,
settlements or claims against officers and directors of Employer, including
Employee, which would otherwise have been the subject of Directors and Officers
Insurance.
9. Effect of Reorganization. If the Employer is at any time before or after
a Change of Control merged or consolidated into or with any other corporation or
other entity (whether or not the Employer is the surviving entity), or if
substantially all of the assets thereof are transferred
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to another corporation, the provisions of this Agreement will be binding upon
and inure to the benefit of the corporation or other entity resulting from such
merger or consolidation or the acquirer of such assets, voting power or control,
and this Section 9 will apply in the event of any subsequent merger or
consolidation or transfer of assets.
In the event of any merger, consolidation, or sale of assets described
above, nothing contained in this Agreement will detract from or otherwise limit
Employee's right to participate or privilege of participation in any stock
option or purchase plan or any bonus, profit sharing, pension, group insurance,
hospitalization, or other incentive or benefit plan or arrangement which may be
or become applicable to executives of the corporation resulting from such merger
or consolidation or the corporation acquiring such assets of the Employer.
In the event of any merger, consolidation or sale of assets described
above, references to the Employer in this Agreement shall unless the context
suggests otherwise be deemed to include the entity resulting from such merger or
consolidation or the acquirer of such assets.
10. No Duty to Mitigate. There shall be no requirement on the part of the
Employee to seek other employment or otherwise mitigate damages in order to be
entitled to the full amount of any payments and benefits to which Employee is
entitled under this Agreement, and the amount of such payments and benefits
shall not be reduced by any compensation or benefits received by Employee from
other employment.
9. Miscellaneous.
(a) All notice hereunder to the parties hereto shall be in writing sent by
certified or registered mail, return receipt requested, postage prepaid, or by
telegram, telex or telecopy, addressed to the respective parties at the
following addresses:
EMPLOYER: COMFORCE Corporation
COMFORCE Operating, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
EMPLOYEE: Xxxxxxx Xxxxxxxxxx
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxx, XX 00000
Any party may, by written notice complying with the requirements of this
section, specify another or different person or address for the purpose of
notification hereunder. All notices shall be deemed to have been given and
received on the next day following the sending of such telegram, telex or
telecopy, or if mailed, on the third business day following such mailing.
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(b) If the Employer fails to timely make any payment to the Employee that
is required to be made hereunder, the amount not timely paid shall bear interest
after the date it is due hereunder at the rate of 18% per annum until it is
paid. All payments required to be made by the Employer hereunder to Employee or
his dependents, beneficiaries, or estate will be subject to the withholding of
such amounts relating to tax and/or other payroll deductions as may be required
by law.
(c) This Agreement contains the entire and only agreement of the parties
hereto respecting the matters herein set forth, supersedes all prior agreements
and understandings between the parties hereto regarding the matters hereby
contemplated, and may not be changed or terminated orally, nor shall any change,
termination or attempted waiver of any of the provisions contained in this
Agreement be binding unless in writing and signed by the party against whom the
same is sought to be enforced, nor shall this section itself be waived verbally.
This Agreement may be amended only by a written instrument duly executed by or
on behalf of the parties hereto.
(d) This Agreement and all of its provisions, rights and obligations shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors. This Agreement may be assigned by Employer to any person,
firm or corporation which shall become the owner of substantially all of the
assets of Employer or which shall succeed to the business of Employer; provided,
however, that in the event of any such assignment Employer shall obtain an
instrument in writing from the assignee in which such assignee assumes the
obligations of Employer hereunder and shall deliver an executed copy thereof to
Employee.
(e) This Agreement is made and intended to be performed principally in the
State of New York and shall take effect under, be construed and enforced
according to, and the rights and obligations of the parties shall be governed in
all respects by, the laws of the State of New York. Should any action be brought
to interpret or enforce the terms hereof, the prevailing party shall be awarded
costs and reasonable attorneys' fees.
(f) Any controversy, dispute or claim arising out of or relating to this
Agreement, or the breach hereof, shall at the option of Employee be resolved by
(i) arbitration in accordance with the then current rules of the American
Arbitration Association and all findings of fact by the arbitrators shall be
conclusive and binding on the parties or (ii) litigation before a federal or
state court of competent jurisdiction located in the State of New York. If the
Employee elects to have the matter resolved by arbitration, the controversy or
claim shall be submitted to the American Arbitration Association through its New
York, New York office, and the hearing of such dispute will be held in New York,
New York. The decision of the arbitrator(s) will be final and binding on all
parties to the arbitration and said decision may be filed as a final judgment in
any court.
(g) The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall in no way affect the interpretation of
any of the terms or conditions of this Agreement.
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(h) If any provision or part thereof of this Agreement for any reason shall
be validly held by an official body to be invalid or unenforceable, the valid
and enforceable provisions or parts thereof shall continue to be given effect
and bind the Employer and Employee.
(i) Employer shall pay Employee's reasonable legal fees and expenses
incurred in connection with the negotiation of this Agreement.
(j) No right or interest to or in any payments or benefits hereunder shall
be assignable by the Employee; provided, however, that this provision shall not
preclude him from designating one or more beneficiaries to receive any amount
that may be payable after his death and shall not preclude the legal
representative of his estate from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of intestacy, to the
person or persons entitled thereto under the laws of intestacy applicable to his
estate. The term "beneficiaries" as used in this Agreement shall mean a
beneficiary or beneficiaries so designated to receive any such amount, or if no
beneficiary has been so designated, the legal representative of the Employee's
estate.
(k) No right, benefit, or interest hereunder, shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt, or obligation, or to
execution, attachment, levy, or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void, and of no effect.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the day
and year first above mentioned.
COMFORCE CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Its:
COMFORCE OPERATING, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Its:
EMPLOYEE
/s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxxxx
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