Exhibit 10.1
EMPLOYMENT AGREEMENT RE: XXXXXX
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and
between Diversified Corporate Resources, Inc., a Texas corporation (herein
referred to as the "DCRI"), and Xxxxxx X. Xxxxxx (herein referred to as the
"Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by Mountain, Ltd., a Maine
corporation ("Mountain") which is a subsidiary of DCRI, pursuant to that certain
Employment Agreement Re: Xxxxxx (herein referred to as the Existing Agreement")
dated August 6, 1999, by and among DCRI, the Executive, Mountain and MAGIC
Northeast, Inc., a Delaware corporation; and
WHEREAS, DCRI and certain of its subsidiaries (including Mountain),
divisions and affiliates (herein collectively referred to as the "Contract
Group") are engaged in the contract staffing business; and
WHEREAS, the parties desire to employ the Executive as the President of
the Contract group; and WHEREAS, the parties hereto desire to have the terms and
conditions of such employment set forth in this Agreement.
NOW THEREFORE, for and in consideration of the mutual advantages and
benefits accruing respectively to the parties hereto, the mutual promises
hereinafter made and the acts to be performed by the respective parties hereto,
DCRI and the Executive do hereby contract and agree as follows:
1. Employment. DCRI hereby employs the Executive as the President
of both Mountain and the Contract Group. The parties acknowledge that the
Contract Group (a) includes Mountain, Datatek Group Corporation, Information
Systems Consulting Corporation, and a division of DCRI known as MPR of Atlanta,
and (b) will include any other agencies or entities of DCRI which are hereafter
made a part of the Contract Group. Executive hereby accepts such employment and
agrees to perform the duties and render services as herein set forth. Such
employment shall continue during the term of this Agreement.
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2. Term. Except in the case of earlier termination as herein
specifically provided, the term of this Agreement shall be for the period of
time beginning retroactive to September 1, 2001, and ending September 30, 2002
(herein referred to as the "Initial Term"). This Agreement shall continue
subsequent to the Initial Term unless and until (a) either this Agreement or the
Existing Agreement are terminated for some reason permitted under the terms of
this Agreement or the terms of the Existing Agreement, or (b) one of the parties
hereto shall give written notice to the other party at least ninety (90) days in
advance of termination at any time after June 30, 2002.
3. Compensation. The parties acknowledge that the Executive is
being compensated under the Existing Agreement related to his services to
Mountain, and that such compensation arrangement and the Existing Agreement
shall continue in place and are not being amended or revised by this Agreement.
For services to be provided to the portion of the Contract Group other
than Mountain, the Contract Group will compensate the Executive, during the term
of this Agreement, as follows: (a) the Executive will be paid a base salary of
$5,000.00 per month which will be paid in weekly installments (or in such other
manner as mutually agreed upon by the parties hereto), and (b) during the period
of time (herein referred to as the "MBO Term Period") beginning on each
September 1st during the term of this Agreement and ending on August 31st of the
following year (or such other period as the parties hereto may mutually agree
upon in writing; if the term of this Agreement is terminated in advance of the
end of the twelve month period of time in the MBO Term Period involved, the
lesser period of time will be deemed to be applicable period of time for the
particular MBO Term Period involved unless the parties hereto otherwise agree in
writing), the Executive will have the right to earn and be paid an annual bonus
(herein referred to as the "MBO Bonus") of up to $60,000.00 (such amount shall
be appropriately prorated if the Executive is employed by the Contract Group,
pursuant to this Agreement, for less than twelve (12) months in any MBO Term
Period; such pro rata adjustment shall be based upon the number of months in
which the Executive was employed by the Contract Group during the MBO Term
Period involved). The determination of the amount, if any, of MBO Bonus earned
by the Executive in each MBO Term Period, during the term of this Agreement,
shall be based upon performance of the Contract Group during such calendar
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year (or portion thereof) during the MBO Term Period involved pursuant to a
Management By Objectives ("MBO") program related to two individual and separate
factors (herein referred to as the "MBO Factors"). . The MBO Factors, and the
allocation of the MBO Bonus, shall be as follows: (i) $40,000.00 of the MBO
Bonus for each MBO Term Period shall be allocated to a mutually acceptable
amount of increase in the percentage of the consolidated net, before tax, income
of the Contract Group, excluding Mountain (herein referred to as the "Contract
Group Net Income Before Taxes") in the MBO Term Period involved, in relationship
to the Contract Group Net Income Before Taxes in the prior MBO Term Period
(during the MBO Term Period of September 1, 2001 to August 31, 2002, the prior
period for comparison shall be September 1, 2000 until August 31, 2001), and
(ii) $20,000.00 of the MBO Bonus for each MBO Term Period shall be allocated to
the achievement of stated goals and objectives for DCRI as mutually acceptable
to the parties hereto. The parties agree to use their best efforts to determine
in advance of each MBO Term Period all of the MBO Factors to be applicable
during such MBO Term Period. The parties acknowledge that they have already
established the MBO Factors to be applicable for the period of time commencing
September 1, 2001, and ending August 31, 2002, and that such MBO Factors are set
forth in Exhibit A to this Agreement. Payment of the MBO Bonus shall be paid
within thirty (30) days of the date of completion of the financial statements of
DCRI and the Contract Group for the MBO Term Period involved. .
In addition to the aforesaid compensation arrangement, and except as
otherwise provided herein, commencing retroactive to January 1, 2001, and
continuing each month thereafter until the date this Agreement is terminated,
the Executive shall be entitled to be paid by the Contract Group, an automobile
allowance of $500.00 per month.
4. Duties and Services. During the term of this Agreement, the
Executive agrees to (a) do his utmost to enhancing and developing the Contract
Group, and (b) perform such duties or render such services which the Board of
Directors of DCRI (the "Board"), or the Chief Executive Officer or President of
DCRI, shall periodically confer upon on the Executive, and which the Executive
shall agree to perform. In connection with the level of authority, and the
duties and responsibilities, of the Executive, it is understood by both parties
hereto
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that the Executive shall function as the Unit President (as such position is
reflected in the existing Statement of Policy Regarding Delegation of Authority
of DCRI) of the Contract Group.
5. Termination.
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a. The Contract Group may terminate the Executive's
employment pursuant to this Agreement at any time for "cause" as now or
hereafter defined in the Existing Agreement .
b. The Executive may terminate his employment with the
Contract Group in the same manner, and subject to the same conditions, as set
forth in the Existing Agreement.
c. The Executive's employment by the Contract Group
shall automatically terminate on the date of the Executive's death if the
Executive dies during the term of this Agreement.
d. If the Executive is incapacitated by an accident,
sickness or otherwise, so as to render him mentally or physically incapable of
performing the services required of him pursuant to this Agreement, the
Executive's employment by the Contract Group may be terminated in the same
manner, and subject to the same conditions, as set forth in the Existing
Agreement.
6. Severance and Other Payments.
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a. If the Executive's employment pursuant to this
Agreement is terminated by the Executive for any reason, the Contract Group
shall not be obligated to pay or provide any severance compensation or benefits
to the Executive.
b. If the Executive's employment is terminated, during
the term of this Agreement, for any reason other than "cause" (as defined in the
Existing Agreement) or by the resignation of the Executive (other than a
resignation within thirty (30) days of one of the prohibited actions by DCRI as
hereinafter set forth), the Executive shall be entitled to receive (i) the
unpaid portion of the base compensation payable to the Executive during a six
(6) month period of time subsequent to the date of termination of this
Agreement, and (ii) a prorata share (based upon the number of months, during the
MBO Term Period involved on the date this Agreement is terminated) in which the
Executive was employed by the Contract Group) of the MBO Bonus which the
Executive would otherwise have been entitled to receive had he remained employed
for the entirety of the MBO
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Term Period involved on the date this Agreement is terminated. The prohibited
actions of DCRI which would enable the Executive to resign and still be entitled
to severance compensation, pursuant to the terms of this Agreement, are as
follows: (1) nonpayment by DCRI of any undisputed amount of compensation payable
to the Executive pursuant to this Agreement, with such failure to pay continuing
for a period of ten (10) business days from the date of notice to DCRI of such
nonpayment, (2) the failure of DCRI to withdraw, within ten (10) business days
from the date of receipt by DCRI of the written request of the Executive that
the notification involved be withdrawn, any notification to the Executive that
the Executive must relocate his primary office to some location other than the
offices of Mountain (or its successor if Mountain is no longer in existence for
some reason) at the time involved; such notice may not be given by the Executive
if the Executive consents to the relocation involved, or (3) the failure of the
DCRI to reinstate the title and/or duties of the Executive, within ten (10)
business days form the date of receipt of the written request of the Executive
that the Executive be reinstated as the President of Mountain, with the
attendant duties and responsibilities, if action is taken by DCRI to remove the
Executive as the President of Mountain (or its successor if Mountain is no
longer in existence for some reason), or to change the duties of the Executive
so that the Executive shall cease to function as President of Mountain (or its
successors if Mountain is no longer in existence for some reason); such notice
may not be given by the Executive if the Executive consents to such action by
DCRI by continuing to be employed by DCRI for a period of thirty (30) days after
the Executive is notified that such action has been taken, or is to be taken, by
DCRI or Mountain.
7. Non-Solicitation Agreement. The Executive agrees that, during
the term of this Agreement and for a two (2) year period of time following the
date of termination of employment with the Contract Group, the Executive shall
not (a) solicit for employment or hire any individual who was an employee, agent
or contractor of DCRI, or any of its subsidiaries or affiliates, on the date of
termination of such employment or at any time within the twelve (12) months
preceding the date of termination of such employment, or (b) solicit the
business of any person or entity who is or was a customer, client, agent or
representative of DCRI, or any of the subsidiaries or affiliates, at the date of
termination of such employment, or at any time during the twelve (12) months
preceding
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the date of termination of such employment. The covenants and agreements set
forth in this Paragraph 7 shall survive the termination of this Agreement.
8. Nondisclosure Agreement. During the term of this Agreement, it
is anticipated that DCRI may provide to the Executive certain confidential and
proprietary information owned by DCRI, and that the Executive may provide to
DCRI certain other confidential and proprietary information and/or documentation
(the information and documentation provided by the Executive is herein referred
to as the "Employee Information") which shall become the property of DCRI or one
or more of its subsidiaries or affiliates. The Executive acknowledges that the
Executive occupies or will occupy a position of trust and confidence with DCRI,
and that DCRI would be irreparably damaged if Executive were to breach the
covenants set forth in this Paragraph 8. Accordingly, the Executive agrees that
he will not, without the prior written consent of DCRI, at any time during the
term of this Agreement or any time thereafter, except as may be required by
competent legal authority or as required by DCRI to be disclosed in the course
of performing the Executive's duties under this Agreement for DCRI, use or
disclose to any person, firm or other legal entity, any confidential records,
secrets or information related to DCRI or any parent, subsidiary or affiliated
person or entity (collectively, "Confidential Information"). The parties
acknowledge that Confidential Information (a) shall include, without limitation,
information about the customer lists, product pricing, data, know-how,
processes, ideas, product development, market studies, computer software and
programs, database technologies, strategic planning, and risk management of
DCRI, and (b) shall not include, for purposes of this Paragraph 8, the Employee
Information. The Executive acknowledges and agrees that all Confidential
Information that he has acquired, or may acquire, was received, or will be
received in confidence and as a fiduciary of DCRI. The Executive will exercise
utmost diligence to protect and guard such Confidential Information. The
Executive agrees that he will not, without the express written consent of the
Board, take with him upon the termination of this Agreement any document or
paper, or any photocopy or reproduction or duplication thereof, relating to any
Confidential Information.
The Executive's obligations under this Paragraph 8 shall survive the
termination of this Agreement.
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9. Notices. All notices or other instruments or communications
provided for in this Agreement shall be in writing and signed by the party
giving same and shall be deemed properly given if delivered in person, including
delivery by overnight courier, or if sent by registered or certified United
States mail, postage pre-paid, addressed to such party at the address listed
below. Each party may, by notice to the other party, specify any other address
for the receipt of such notices, instruments or communications. Any notice,
instrument or communication sent by telegram shall be deemed properly given only
when received by the person to whom it is sent.
10. Miscellaneous.
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a. Subject to the condition that this Agreement is not
assignable by either party without the prior written consent of the other party
(except that DCRI may assign this Agreement to an affiliate of DCRI, or to a
third party purchaser of Mountain or its assets), the terms and provisions of
this Agreement shall inure to the benefit of, and shall be binding on, the
parties hereto and their respective heirs, representatives, successors and
assigns.
b. With the exception that the Existing Agreement shall
continue in full force and effect, (i) this Agreement supersedes all other
agreements, either oral or in writing, between the parties to this Agreement,
with respect to the employment of the Executive by the Contract Group, (ii) this
Agreement contains the entire understanding of the parties and all of the
covenants and agreement between the parties with respect to the Executive's
employment by the Contract Group pursuant to this Agreement, (iii) any such
prior agreements are hereby terminated without obligation for any payments
otherwise due thereunder, and (iv) no waiver or modification of this Agreement
or of any covenant, condition or limitation herein contained shall be valid,
unless in writing and duly executed by the party to be charged therewith, and no
evidence of any waiver or modification shall be offered or received in evidence
of any proceeding, arbitration, or litigation between the parties hereto arising
out of or affecting this Agreement, or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid, and the parties further agree that the provisions of this Paragraph
may not be waived except as herein set forth.
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c. All agreements and covenants contained herein are
severable and in the event any of them, with the exception of those contained in
Paragraph 1 hereof, shall be held to be invalid, as written pursuant to the
arbitration or judicial proceedings provided for in this Agreement, this
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein.
d. Any controversy between the parties to this Agreement
involving the construction or application of any of the terms, covenants, or
conditions of this Agreement shall be submitted to arbitration in Maine, if
either party to this Agreement shall request arbitration by notice in writing to
the other party. In such event, the parties to this Agreement shall, within
thirty (30) days after this Paragraph 10(d) is invoked, both appoint one person
as an arbitrator to hear and determine the dispute, then the two arbitrators so
chosen shall, within fifteen (15) days, select a third impartial arbitrator; the
majority decision of the arbitrators shall be final and conclusive upon the
parties to this Agreement. Each party to the arbitration proceedings shall bear
his or its own expenses, except that the expenses of the arbitrators shall be
borne equally by DCRI and the Executive.
e. In the event of any litigation between the parties
related to the compliance with the terms and conditions of this Agreement, the
parties hereto acknowledge and agree that (i) such litigation proceedings must
be held in the state of Maine, and (ii) the prevailing party in such litigation
proceedings shall be entitled to recover, from the nonprevailing party,
reasonable attorneys' fees and expenses incurred in connection with the dispute
involved.
f. This Agreement has been made under and shall be
governed by the laws of the state of Maine.
This Agreement is dated and effective as of September 1, 2001, but is
actually executed this day of March, 2002.
COMPANY:
DIVERSIFIED CORPORATE RESOURCES, INC.
By:
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Xxxxx X. Xxxxxxxx, President
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Address: 00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
EXECUTIVE:
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Xxxxxx X. Xxxxxx
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
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