EXHIBIT 10.2
ADVANTAGE PAYROLL SERVICES, INC.
EMPLOYMENT AND NON-COMPETE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 15th day of March 2002
between Advantage Payroll Services, Inc., a Delaware corporation (the "Company")
and Xxxxx X. XxXxxxx ("Executive").
The Company and the Executive desire to enter into an agreement (i)
defining the relative rights of the Company and the Executive, (ii) setting
forth the obligation of Executive to refrain from competing with the Company
during his employment with the Company and for a period of time thereafter as
provided herein and (iii) setting forth certain terms of Executive's employment
with the Company.
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in Section 4 hereof (the "Employment Period").
2. Position and Duties.
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(a) During the Employment Period, Executive shall serve as Vice President
and Chief Financial Officer and shall have the normal duties, responsibilities
and authority associated with such position, subject to the power or authority
of the Company's board of directors (the "Board") or its president to expand or
limit such duties, responsibilities and authority and to override actions of the
Executive.
(b) Executive shall report to the president of the Company, and Executive
shall devote his best efforts and his full business time and attention (except
for permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company and its Subsidiaries.
Executive shall perform his duties and responsibilities to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by the Company,
directly or through one of more Subsidiaries.
3. Base Salary and Benefits.
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(a) During the first year of the Employment Period, Executive's base salary
shall be $160,000.00 (the Executive's per annum salary, the "Base Salary"). On
each anniversary of this Agreement, Executive's Base Salary shall increase by 4%
per annum or such other rate as the Board may in good faith designate from time
to time. The Base Salary shall be payable in regular installments in accordance
with the Company's general payroll practices and shall be subject to customary
withholding. In addition, during the Employment Period, Executive shall be
entitled to participate in all of the Company's employee benefit programs for
which senior executive employees of the Company and its Subsidiaries are
generally eligible, and Executive shall be entitled to four weeks of paid
vacation each year, which if not taken may not be carried forward to any
subsequent year.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) At the end of each fiscal year, Executive shall be eligible to receive
a bonus of up to $50,000.00 (the "Bonus") based upon the attainment by
Executive, as determined in good faith by the Board, of certain performance
objectives set in good faith each year by the president of the Company and
approved by the Board.
4. Term.
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(a) Unless renewed by the mutual agreement of the Company and Executive,
the Employment Period shall end on the third anniversary hereof (the "Expiration
Date"); provided that (i) the Employment Period shall terminate prior to the
Expiration Date upon Executive's resignation, death or permanent disability or
incapacity (as determined by the Board in its good faith judgment) and (ii) the
Employment Period may be terminated by the Company at any time prior to such
date for Cause (as defined below) or without Cause.
(b) If the Employment Period is terminated by the Company without Cause
prior to the third anniversary of the date of this Agreement, Executive shall be
entitled to receive his Base Salary (the "Severance Payment") until the earlier
of (i) the Expiration Date or (ii) the twelve-month anniversary of the date of
such Executive's termination; provided, however, that such Executive shall be
entitled to the Severance Payment if and only if Executive has not breached the
provisions of Sections 5, 6 and 7 hereof.
(c) If the Employment Period is terminated by the Company for Cause or is
terminated pursuant to clause (a)(i) above, Executive shall be entitled to
receive his Base Salary through the date of termination.
(d) All of Executive's rights to fringe benefits and bonuses hereunder
(if any) which accrue or become payable after the termination of the Employment
Period shall cease upon such termination. The Company may offset any amounts
Executive owes it or its Subsidiaries against any amounts it owes Executive
hereunder.
(e) For purposes of this Agreement, "Cause" means (i) a breach of
Section 5, 6 or 7 of this Agreement, (ii) a breach of Executive's duty of
loyalty to the Company or any of its Subsidiaries or any act of dishonesty or
fraud with respect to the Company or any of its Subsidiaries, (iii) the
commission by the Executive of a felony, a crime involving moral turpitude or
other act or omission causing material harm to the standing and reputation of
the Company or any of its Subsidiaries, (iv) Executive's continued failure to
perform his duties to the Company or any of its Subsidiaries, which failure
remains uncured thirty days following written notice thereof or is incapable of
being cured, or (v) the commission of acts of negligence in the performance of
his duties which are substantially injurious to the Company or any of its
Subsidiaries, which acts remain uncured thirty days following written notice
thereof by the Company or which is incapable of being cured.
5. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while employed by the Company and its
Subsidiaries (including such information, observations and data obtained while
employed by the Company, concerning the business or affairs of the Company or
any other Subsidiary ("Confidential Information") are the property of the
Company or such Subsidiary. Therefore, Executive agrees that he shall not
disclose to any unauthorized person or use for his own purposes any Confidential
Information without the prior written consent of the Board, unless and to the
extent that the aforementioned matters become generally known to, and available
for use by, the public other than as a result of Executive's acts or omissions.
Executive shall deliver to the Company at the termination of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the Company or
any Subsidiary which he may then possess or have under his control.
6. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable),
including, without limitation, computer software and data, which relate to the
Company's or any of its Subsidiaries' actual or anticipated business, research
and development or existing or future products or services and which are
conceived, developed or made by Executive while employed by the Company or its
Subsidiaries ("Work Product") belong to the Company or such Subsidiary.
Executive shall promptly disclose such Work Product to the Board and perform all
actions reasonably requested by the Board (whether during or
after the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).
7. Non-Compete, Non-Solicitation.
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(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of his employment with the
Company he shall become familiar, and during his employment with the Company, he
has become familiar, with the Company's trade secrets and with other
Confidential Information concerning the Company and its predecessors and its
Subsidiaries and that his services have been and shall be of special, unique and
extraordinary value to the Company and its Subsidiaries. Therefore, Executive
agrees that, during the Employment Period and for two years thereafter (the
"Noncompete Period"), he shall not directly or indirectly own any interest in,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business competing with the businesses of the Company or
its Subsidiaries (including, without limitation, payroll services or tax filing
services), as such businesses exist or are in process on the date of the
termination of Executive's employment anywhere in the United States. Nothing
herein shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly traded,
so long as Executive has no active participation in the business of such
corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the Company
or its Subsidiaries).
(c) If, at the time of enforcement of this Section 7, a court shall hold
that the duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum duration,
scope or area reasonable under such circumstances shall be substituted for the
stated duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law. Executive agrees that the restrictions contained in this
Section 7 are reasonable.
(d) In the event of the breach or a threatened breach by Executive of any
of the provisions of this Section 7, the Company, in addition and supplementary
to other rights and remedies existing in its favor, may apply to any court of
law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce or prevent any violations of the provisions hereof (without posting a
bond or other security).
In addition, in the event of an alleged breach or violation by Executive of
this Section 7, the Noncompete Period shall be tolled until such breach or
violation has been duly cured.
(e) Executive agrees that termination of the Noncompete Period under the
terms of this Agreement shall not serve to terminate the existence of any other
non-competition or non-solicitation agreement that Executive has with the
Company, including, without limitation, pursuant to the terms of the
Recapitalization Agreement.
8. Executive's Representations. Executive hereby represents and warrants to
the Company that (i) the execution, delivery and performance of this Agreement
by Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges that he has been advised to consult
with independent legal counsel regarding his rights and obligations under this
Agreement, and that he fully understands the terms and conditions contained
herein.
9. Survival. Sections 5, 6 and 7 and Sections 10 through 17 shall survive
and continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.
10. Notices. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, or mailed by first class mail, return
receipt requested, to the recipient at the address below indicated:
Notices to Executive:
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Xxxxx X. XxXxxxx
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxx 00000
Notices to the Company:
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Advantage Payroll Services, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.
11. Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
12. Complete Agreement. This Agreement, the Recapitalization Agreement,
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those documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
13. No Strict Construction. The language used in this Agreement shall
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be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
14. Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15. Successors and Assigns. This Agreement is intended to bind and
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inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of the Company.
16. Choice of Law. All issues and questions concerning the
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construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
17. Amendment and Waiver. The provisions of this Agreement may be
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amended or waived only with the prior written consent of the Company, the
Executive and the Investors, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.
18. Termination of Existing Agreement. By the execution of this
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Agreement, the parties agree to terminate the existing Employment and
Non-Compete Agreement dated May 10, 1999.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Employment
and Non-Compete Agreement as of the date first written above.
ADVANTAGE PAYROLL SERVICES, INC.
By: /s/ XXXXXXX X. XXXXXXX, XX.
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Its: President & CEO
/s/ XXXXX X. XXXXXXX
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Xxxxx X. XxXxxxx
