EXHIBIT 10.19
FORM OF FIRST AMENDMENT OF
EMPLOYMENT AGREEMENTS OF _______________________
This Amendment of Employment Agreement (the "Amendment") is made and
entered into this __ day of October 2007, by and between _________________
(the "Employee") and General Employment Enterprises, Inc., an Illinois
Corporation (the "Company") (collectively, the "Parties").
WHEREAS, the Parties entered into an Employment Agreement effective as
of December __, 2001 (the "Agreement"); and
WHEREAS, the Parties now consider it desirable to amend the terms and
conditions of the Agreement by this Amendment to reflect the requirements of
Internal Revenue Code Section 409A and to clarify the rights of the Parties;
NOW THEREFORE, in accordance with Section 9 of the Agreement and in
consideration of the mutual promises herein made, the sufficiency of which are
expressly acknowledged, the Parties agree as follows:
1. The parenthetical in the first sentence of Section 3 immediately
preceding subsection 3(i) that states "(other than terminations by the
Employee for Good Reason, which shall be subject to the terms of Section 5
below)" is hereby removed.
2. The following new Section 4 shall be substituted for Section 4 of
the Agreement:
"4. Severance Following Change in Control. Following
a Change in Control, upon the termination of the Employee's
employment by the Company other than for Cause, the Employee
shall be entitled to: (a) a lump sum cash payment equal to
two times the sum of the Employee's Base Salary (as defined
below) and the Average Annual Bonus (as defined below),
(b) accelerated vesting of all cash or stock awards previously
awarded to the Employee under any bonus or other incentive
programs in which the Employee is a participant, (c) the
Employee's 'severance bonus,' which equals the Employee's
Average Annual Bonus multiplied by a fraction, the numerator
of which is the number of days elapsed in the fiscal year of
termination and the denominator of which is 365, (d) payment
for any accrued but unused vacation pay, (e) continuation of
coverage for a period of two years under the Company's
medical, dental, and vision plans, and (f) continuation of
coverage for a period of two years under the Company's other
benefit plans and programs in which the Employee is a
participant on the date of his termination to the extent
coverage is permitted by law and the plan terms. In the event
coverage under the benefits provided in clause 4(e) or 4(f)
are not permitted by law or the plan terms, the Employee shall
receive a lump sum payment from the Company equal to the value
of such benefits, payable within ten (10) business days of
termination. For purposes of this Agreement, the Employee's
Average Annual Bonus shall be equal to the average of the
annual bonus paid to the Employee for each of the last three
full fiscal years before employment termination. For purposes
of this Agreement, the Employee's Base Salary shall be the
Employee's annual base salary payable as of his employment
termination or, if greater, the Employee's annual base salary
payable immediately prior to the Change in Control. Amounts
to be paid to the Employee under clauses (a) through (d) above
of this Section 4 shall be paid within ten (10) business days
of his employment termination."
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3. The following new Section 6(d) shall be substituted for
Section 6(d) of the Agreement:
"(d) Good Reason. For purposes of this Agreement,
'Good Reason' means there is, without the Employee's written
consent:
(i) a material diminution in the Employee's base
compensation;
(ii) a material diminution in the Employee's
authority, duties, or responsibilities;
(iii) a material diminution in the authority,
duties, or responsibilities of the supervisor to whom the
Employee is required to report;
(iv) a material diminution in the budget over
which the Employee retains authority;
(v) a material change in the geographic location
at which the Employee must perform the services; and
(vi) any other action or inaction that constitutes
a material breach by the Company of this Agreement.
The Employee must provide written notice to the
Company within 90 days of the initial existence of one or
more of the above conditions to constitute Good Reason. Upon
such notice, the Company shall have a period of at least 30
days during which it may remedy the condition. A separation
from service will not constitute a termination for Good
Reason pursuant to Section 5 of the Agreement unless such
separation occurs during a period of time not to exceed two
years following the initial existence of one or more of the
above conditions."
4. The following new Sections 10 through 13 are hereby added to the
Agreement, immediately after Section 9 thereof:
"10. Mutual Arbitration Agreement. Employee and the
Company each agree, to the extent permitted by law, to
arbitrate before a single neutral arbitrator, in accordance
with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association regarding
discovery, any dispute or claim arising out of, related to, or
connected with Employee's employment, termination of
employment, or this Agreement, including the interpretation,
validity, construction, performance, breach, or termination
thereof, including any claim against any current or former
agent or employee of the Company, whether the dispute or claim
arises in tort, contract, or pursuant to a statute,
regulation, or ordinance now in existence or which in the
future may be enacted or recognized, including, but not
limited to any claim for fraud, promissory estoppel, breach
of contract, breach of the covenant of good faith and fair
dealing, wrongful termination, infliction of emotional
distress, defamation, interference with contract or
prospective economic advantage, unfair business practices, any
claim under any and all federal, state, or municipal statutes,
regulations, or ordinances that prohibit discrimination,
harassment, or retaliation of any kind, any claim for
non-payment or incorrect payment of wages, commissions,
bonuses, severance, or employee fringe benefits, and any
claim regarding stock or stock options, except that any
dispute or claim for workers' compensation benefits or
unemployment insurance benefits shall be excluded from this
mutual agreement to arbitrate. The arbitration shall be
conducted in
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DuPage County, Illinois. The Company shall bear all costs of
the arbitration proceeding. All reasonable costs and expenses
(including fees and disbursements of counsel) incurred by the
Employee in seeking to interpret this Agreement or enforce
rights pursuant to this Agreement shall be paid on behalf of
or reimbursed to the Employee promptly by the Company, if the
Employee is successful in asserting such rights."
11. Indemnification and Insurance. For the period
from the Commencement Date through at least the sixth
anniversary of the Employee's termination of employment from
the Company, the Company agrees to maintain the Employee as an
insured party on all directors' and officers' insurance
maintained by the Company for the benefit of its directors and
officers on at least the same basis as all other covered
individuals and provide the Employee with at least the same
corporate indemnification as its other senior officers.
12. Effect on Other Obligations. Payments and
benefits herein provided to the Employee by the Company will
be made without regard to and in addition to any other
payments or benefits required to be paid to the Employee at
any time hereafter under the terms of any other agreement
between the Employee and the Company (it being understood and
agreed that the Employee will not be entitled to severance or
termination benefits in addition to those provided herein
under any severance or termination plan of the Company or its
affiliates). No payments or benefits provided the Employee
hereunder will be reduced by any amount the Employee may earn
or receive from employment with another employer or from any
other source without violation of this Agreement. In no event
will the Employee be obliged to seek other employment or take
any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement.
13. Code Section 409A. This Agreement is intended to
comply with Section 409A of the Internal Revenue Code of 1986,
as amended (the 'Code') and the interpretative guidance
thereunder, including the exceptions for short-term deferrals,
separation pay arrangements, reimbursements, and in-kind
distributions, and shall be administered accordingly. This
Agreement shall be construed and interpreted with such intent.
To the extent payments under Section 4 above do not qualify as
short-term deferrals under Code Section 409A and Treas. Reg.
Section 1.409A-1(b)(4) (or any similar or successor
provisions), and the Employee is a Specified Employee (as
defined below) as of his termination, distributions to the
Employee may not be made before the date that is six months
after the date of his termination or, if earlier, the date of
the Employee's death (the 'Six-Month Delay Rule'). Payments
to which the Employee would otherwise be entitled during the
first six months following the termination (the 'Six-Month
Delay') will be accumulated and paid on the first day of the
seventh month following the termination. Notwithstanding the
Six-Month Delay Rule set forth in this Section 13:
(a) To the maximum extent permitted under Code
Section 409A and Treas. Reg. Section 1.409A-1(b)(9)(iii)
(or any similar or successor provisions), during each month of
the Six-Month Delay, the Company will pay the Employee an
amount equal to the lesser of (A) the total monthly severance
provided under Section 4 above, or (B) one-sixth (1/6) of the
lesser of (1) the maximum amount that may be taken into
account under a qualified plan pursuant to Code Section
401(a)(17) for the year in which the Employee's termination
occurs, and (2) the sum of the Employee's annualized
compensation based upon the annual rate of pay for services
provided to the Company for the taxable year of the Employee
preceding the taxable year of the Employee in which his
termination occurs (adjusted for any increase during that
year that was expected to
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continue indefinitely if the Employee had not had a
termination); provided that amounts paid under this sentence
will count toward, and will not be in addition to, the total
payment amount required to be made to the Employee by the
Company under Section 4; and
(b) To the maximum extent permitted under Code
Section 409A and Treas. Reg. Section 1.409A-1(b)(9)(v)(D)
(or any similar or successor provisions), within ten (10) days
of the termination, the Company will pay the Employee an
amount equal to the applicable dollar amount under Code
Section 402(g)(1)(B) for the year of the Employee's
termination; provided that the amount paid under this sentence
will count toward, and will not be in addition to, the total
payment amount required to be made to the Employee by the
Company under Section 4.
(c) For purposes of this Agreement, 'Specified
Employee' has the meaning given that term in Code Section
409A and Treas. Reg. 1.409A-1(c)(i) (or any similar or
successor provisions). The Company's 'specified employee
identification date' (as described in Treas.
Reg. 1.409A-1(c)(i)(3)) will be December 31 of each year, and
the Company's 'specified employee effective date' (as
described in Treas. Reg. 1.409A-1(c)(i)(4) or any similar or
successor provisions) will be February 1 of each succeeding
year."
IN WITNESS WHEREOF, the parties have executed this Amendment on this
__ day of October 2007.
GENERAL EMPLOYMENT ENTERPRISES, INC. EMPLOYEE
By: ___________________________ _________________________
Its: ___________________________
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