EXHIBIT 10.24
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AGREEMENT is entered into by and between TechTeam Global, Inc. (the
"Company"), and Xxxxxxx X. ("Xxxxx") Xxxxx (the "Executive"), effective as of
February 3, 2006.
1. Employment Period. The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the period
commencing on February 16, 2006 (the "Commencement Date") and ending
on February 15, 2009, unless earlier terminated as provided herein
(the "Employment Period").
2. Terms of Employment.
a) Position and Duties.
(i) During the Employment Period, the Executive shall serve as
Company's President and Chief Executive Officer or in any
other capacity assigned to him by the Board of Directors
("the Board"). Executive shall report to the Chairman of the
Board.
(ii) During the Employment Period, Executive agrees to devote his
full attention and time to the business and affairs of the
Company and to use the Executive's best efforts to: (A)
perform such responsibilities in a professional manner, (B)
promote the interests of the Company and its subsidiaries,
(C) discharge the executive and administrative duties, not
inconsistent with his position, as may be reasonably
assigned to him by the Board, and (D) serve, without
additional compensation, as a director of the Company if
elected.
(iii) At all times, Executive agrees that he has read and will
abide by, any employee handbook, policy, or practice that
the Company has or adopts with respect to its employees
generally, except as modified by this Agreement.
b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary")
of $384,000.00. The Annual Base Salary may be revised from
time to time. The Annual Base Salary shall be paid in
accordance with the Company's normal payroll practices for
senior executives subject only to such payroll and
withholding deductions as are required by law.
(ii) Signing Bonus. The Executive will be paid a one time signing
bonus in the amount of $125,000.00 upon assumption of his
duties. In the event Executive's employment is terminated by
the Company for cause (as defined in paragraph 3(c) herein)
within the first year of the Executive's employment or the
Executive chooses to terminate his employment without cause
(pursuant to paragraph 3(d) herein) within the first year of
Executive's employment, then Executive will be obligated to
return to the Company the $125,000 signing bonus.
(iii) Stock Options. Executive will be granted 125,000 options at
market price. The option price will be market price at close
on the date Executive executes this Agreement. These options
shall vest as follows: 50,000 shares shall vest immediately
upon grant; 40,000 shares shall vest after one year of
employment; and 35,000 shares shall vest after two years of
employment. In the event Executive's employment terminates
other than for cause by the Company pursuant to paragraph
3(c), all options shall immediately vest. The options shall
have a ten (10) year exercise period from the date they are
granted, and shall be subject to the terms and conditions of
the Company's Incentive Stock and Awards Plan.
(iv) Restricted Shares. Executive will be issued 25,000
restricted shares upon assumption of his duties, to vest at
the rate of 25% per year.
(v) Annual Incentive Plan and Long Term Incentive Plan. The
Executive will participate in the Company's Annual Incentive
Plan and Long Term Incentive Plan. The Executive shall be
entitled to any bonuses awarded pursuant to the provisions
of such plans, and will be guaranteed a minimum bonus of
$185,000.00 under the Annual Incentive Plan for fiscal year
2006..
(vi) Savings and Retirement Plans. During the Employment Period,
the Executive shall be eligible to participate in all
savings and retirement plans, practices, policies and
programs to the extent applicable generally to other
executives of the Company in accordance with the provisions
of those plans.
(vii) Welfare and Other Benefits Plans. During the Employment
Period, the Executive and the Executive's eligible family
members shall be entitled to participate in all benefit and
executive perquisites under welfare, fringe and other
similar benefit plans, practices, policies and programs
which may be provided by the Company (including, without
limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and
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travel accident insurance plans and programs) to the extent
applicable generally to other executives of the Company.
(viii) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable business expenses incurred and submitted by the
Executive in accordance with the policies of the Company.
(ix) Company Car. The Company will provide Executive with a
suitable Company-leased automobile or comparable car
allowance up to $500 toward the cost of acquiring or leasing
and maintaining a car for use in connection with the
Executive's performance of services hereunder during the
transition period.
(x) Relocation Expenses. In order to assist Executive's
transition into the Company and the Detroit community, the
Company will lease an appropriate residence (2 bedroom and 2
full bath apartment in the $2,500 to $3,000 per month range)
in the vicinity of the Company's headquarters. Executive
will be reimbursed for periodic travel to his Boston
residence.
3. Termination of Employment.
The Executive's employment may be terminated upon the occurrence of
any event set forth below.
a) Expiration of Employment Period. Executive's employment shall
terminate upon the expiration of the Employment Period or any
extension thereof.
b) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the
Disability (as defined below) of the Executive has occurred
during the Employment Period, it may give to the Executive
written notice of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the
Company shall terminate effective on the thirtieth day after
receipt of such notice by the Executive. For purposes of this
Agreement, "Disability" shall mean the Executive's inability to
perform his normal duties for the Company for three months or
more during any twelve month period.
c) By Company With Cause. The Company may terminate the Executive's
employment for "Cause." For purposes of this Agreement, "Cause"
shall mean:
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(i) any material breach of this Agreement by the Executive,
which breach is not remedied within thirty (30) days after
written notice thereof, specifying the nature of such breach
in reasonable detail, is given by the Board to the
Executive,
(ii) Executive's conviction of a felony or other crime involving
moral turpitude, any act or omission by the Executive during
the Employment Period involving willful malfeasance or gross
negligence in the performance of his duties hereunder,
and/or
(iii) Executive's failure to follow the reasonable instructions
given in good faith by the Board, which failure is not
remedied within thirty (30) days after written notice
thereof specifying the details of such conduct is given by
the Board to the Executive.
In the event of a termination for cause, the Executive shall not
be entitled to any further compensation or benefits other than
base pay through the date of termination and any benefits that
have vested as of the date of termination under applicable plan
documents.
d) Without Cause. This Agreement may be terminated by either the
Company or the Executive, without Cause upon 90 days notice. If
the Executive is terminated by the Company without cause prior to
February 15, 2009, the Executive will be entitled to his pay and
benefits as set forth herein through February 15, 2009, except
that Executive shall not be entitled to participate further in
the Long Term Incentive Plan or the Annual Incentive Plan.
In the event Executive exercises his right to terminate this
Agreement without cause, the Executive shall not be entitled to
any further compensation or benefits other than base pay through
the date of termination and any benefits that have vested as of
the date of termination under applicable plan documents.
e) By Executive With Cause. The Executive may terminate this
Agreement for cause by giving thirty (30) days written notice to
the Company of his belief that a factual basis constituting cause
(as defined below) exists for terminating the employment
relationship, and requesting that the Company, within the thirty
(30) day correction period, take measures to correct this
situation. Such notice must cite to this paragraph 3(e) to be
effective. If the Company fails to take corrective measures by
the end of the thirty (30) day correction period, Executive may
then terminate this Agreement, upon expiration of the thirty (30)
day correction period, with ten (10) days notice of his intent to
do so. For purposes of this paragraph, the term "cause" means:
(i) the Company's failure to provide compensation as set forth in
this Agreement, or (ii) the Company's material breach of a
provision of this Agreement which renders
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Executive's performance impossible. If the Executive terminates
this Agreement with cause prior to February 15, 2009, the
Executive will be entitled to his pay and benefits as set forth
herein through February 15, 2009, except that Executive shall
not be entitled to participate further in the Long Term Incentive
Plan and the Annual Incentive Plan.
f) Date of Termination. "Date of Termination" or "Termination Date"
means the effective date of termination determined in accordance
with the provisions of this Paragraph 3.
4. Confidential Information; Noncompetition.
a) The Executive shall hold in a fiduciary capacity for the benefit
of the Company all secret or confidential information, knowledge
or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by
the company or any of its affiliated companies and which shall
not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of
this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior
written consent of the Company or as may otherwise be required by
law or legal process (provided the Company has been given notice
of an opportunity to challenge or limit the scope of disclosure
purportedly so required), communicate or divulge any such
information, knowledge or data to anyone other than the Company
and those designated by it.
b) Executive agrees not to utilize his knowledge of the business of
the Company or his relationships with investors, suppliers,
customers, clients, or financial institutions to compete with the
Company in any business the same as, or similar to, the business
conducted by the Company during the term of this Agreement.
Executive also agrees that unless his employment is terminated by
the Executive for cause pursuant to paragraph 3(e), he will not:
1. Work for, consult with, provide any services to or
provide any information to any firm or entity or person
that competes with, or engages in, or carries on any
aspect of the Company's business services in
competition with the Company within a one (1) year
period following his Termination Date; and
2. Directly or indirectly, assist, promote or encourage
any employees or clients of the Company to terminate or
discontinue their relationship with the Company for at
least a two (2) year period following his Date of
Termination.
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c) Executive acknowledges that his services hereunder are of a
special, unique, and intellectual character and his position with
the Company places him in a position of confidence and trust with
customers, suppliers, and employees of the Company. The Executive
further acknowledges that to perform his position, he will
necessarily be given access to confidential information of the
Company. Executive will continue to develop personal
relationships with the Company's customers, financiers,
suppliers, and employees. The parties expressly agree that these
provisions are reasonable, enforceable, and necessary to protect
the Company's interests. In the unlikely event, however, that a
court of competent jurisdiction was to determine that any portion
of such provisions is unenforceable, then the parties agree that
the remainder of the provisions shall remain valid and
enforceable to the maximum extent possible.
d) The Executive agrees that it would be difficult to measure
damages to the Company from any breach of the covenants contained
in this Paragraph 4, but that such damages from any such breach
would be great, incalculable and irremediable, and that money
damages would be an inadequate remedy. Accordingly, the Executive
agrees that the Company may have specific performance of these
provisions in any court of competent jurisdiction. The parties
agree, however, that the specific performance remedies described
above shall not be the exclusive remedies, and the Company may
enforce any other remedy or remedies available to it either in
law or in equity including, but not limited to, temporary,
preliminary, and/or permanent injunctive relief.
5. Successors.
a) This Agreement is personal to the Executive and shall not be
assignable by the Executive.
b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
6. Arbitration.
The parties agree that any dispute, claim, or controversy based on
common law, equity, or any federal, state, or local statute,
ordinance, or regulation (other than workers' compensation claims or
disputes relating to Section 4 of this Agreement) arising out of or
relating in any way to the Executive's employment, the terms,
benefits, and conditions of employment, or concerning this Agreement
or its termination and any resulting termination of employment,
including whether such a dispute is arbitrable, shall be settled by
arbitration in Southfield, Michigan. This agreement to arbitrate
includes but is not limited to all claims for any form of illegal
discrimination, improper or unfair treatment or dismissal, and all
tort claims. The Executive will still have a right to file a
discrimination charge with a federal or state agency, but the final
resolution of any discrimination claim will be
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submitted to arbitration instead of a court or jury. The arbitration
proceeding will be conducted under the employment dispute resolution
arbitration rules of the American Arbitration Association in effect at
the time a demand for arbitration under the rules is made. The
decision of the arbitrator(s), including determination of the amount
of any damages suffered, will be exclusive, final, and binding on all
parties, their heirs, executors, administrators, successors and
assigns. With the exception of claims arising under federal or state
anti-discrimination laws, for which the Company shall pay the
arbitrator's fee, each party will bear its own expenses in the
arbitration for arbitrators' fees and attorneys' fees, for its
witnesses, and for other expenses of presenting its case. Other
arbitration costs, including administrative fees and fees for records
or transcripts, will be borne equally by the parties. Notwithstanding
anything in this Section to the contrary, if the Executive prevails
with respect to any dispute submitted to arbitration under this
Section, the Company will reimburse or pay all legal fees and expenses
that the Executive may reasonably incur as a result of the dispute.
Judgment upon the award of an arbitrator may be entered by any court
of competent jurisdiction.
7. Miscellaneous.
a) This Agreement shall be governed by and construed in accordance
with the laws of Michigan, without reference to principles of
conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written
agreement executed by the parties hereto or their respective
successors and legal representatives.
b) All notices and other communications hereunder shall be in
writing and shall be deemed to be received when (i) hand
delivered (with written confirmation of receipt), (ii) when
received by the addressee, if sent by nationally recognized
overnight delivery service (receipt requested) in each case to
such address as a party may designate by notice to the other
party.
c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
d) This Employment Agreement may be executed through the use of
separate signature pages or in any number of counterpart copies
and each of such counterparts shall, for all purposes, constitute
one agreement binding on all the parties.
e) The provisions of this Agreement contain all of the terms and
conditions agreed upon by the parties relating to the subject
matter of this Agreement and shall supersede all prior agreement,
negotiations, correspondence, undertakings and communications of
the parties, either oral or written, with respect to such subject
matter.
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IN WITNESS WHEREOF, the Executive has executed this Agreement and, subject
to the authorization of its Board of Directors, the Company has caused this
Agreement to be executed in its name on behalf, as of the Commencement Date.
Date: February 3, 2006 /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. ("Xxxxx") Xxxxx
"Executive"
Date: February 3, 2006 TECHTEAM GLOBAL, INC.
By: /s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx,
Chairman of Board of Directors
"Company"
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