EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 3rd day of
September, 1997 (the "Effective Date"), by and between ICCE, INC., a Georgia
corporation, (the "Company") and XXXXXX X. XXXXXXXXX, an individual resident of
Pennsylvania (the "Executive") on the other hand.
WHEREAS, the Company has acquired all of the outstanding capital stock of
Executive's former employer, ACSYS Resources, Inc., a Pennsylvania corporation
("ACSYS"), pursuant to a merger effected in accordance with that certain
Agreement and Plan of Merger, dated September 3, 1997, by and among the
Company, certain shareholders of the Company, ASRI Merger Subsidiary, Inc.,
ACSYS and certain shareholders of ACSYS (the "Merger Agreement" and the
"Merger," respectively); and
WHEREAS, the Company anticipates a public offering of the Company's common
stock ("Common Stock") pursuant to a registration statement to be filed under
the Securities Act of 1933 (the "1933 Act") (the "IPO"); and
WHEREAS, Executive is expected to make a significant contribution to the
success of the Merger and the future success and development of the Company as
the Chief Financial Officer of the Company; and
WHEREAS, Executive is willing to render services to the Company on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Executive and the Company
including, without limitation, the promises and covenants of the parties set
forth herein, the parties hereto, intending to be legally bound, hereby agree
as follows:
ARTICLE 1
EMPLOYMENT
Section 1.1 Term of employment. The term of Executive's employment
hereunder shall commence on the Effective Date hereof and continue for a period
of three (3) years, unless earlier terminated as provided in this Agreement.
At the end of the initial three year term, this Agreement shall automatically
renew for consecutive one year terms unless either party hereto gives written
notice to the other of its intent to terminate sixty (60) days prior to the end
of any term.
Section 1.2 Duties and Responsibilities of Executive. Executive is
hereby employed full time as the Chief Financial Officer (the "CFO") of the
Company. Executive shall devote his full time, energy, and skill to such
office and shall do and perform all services and acts necessary or advisable to
fulfill the duties of such office. In his capacity as an officer of the
Company, Executive shall report to the President ("President") of the Company,
and shall conduct and perform such additional services and activities as may be
determined from time to time by any of them. Executive's authority and
responsibility in the Company shall at all times be subject to the review and
discretion of the Board of Directors, who shall have the final authority to
make decisions regarding the business of the Company. Executive acknowledges
that he has a duty of loyalty to the Company and shall not engage in, directly
and indirectly, any other business or activity that could materially and
adversely affect the Company's business or the Executive's ability to perform
his duties under this Agreement, provided, however, that the Executive shall be
free to participate in board, civic and charitable activities so long as such
activities do not interfere with his duties and responsibilities hereunder.
Section 1.3 Compensation. For services to be rendered by Executive under
this Agreement, Company shall pay Executive as follows. Executive shall be
paid a minimum annual gross salary of one hundred twenty five thousand dollars
($125,000), payable bi-weekly. At the sole discretion of the Board of
Directors of the Company, Executive's annual gross salary may be increased from
time to time throughout the term of this Agreement. At no time during the term
hereof shall the Executive's base salary be decreased from the amount of the
base salary then in effect. Executive shall also be entitled to receive such
bonus as the Board of Directors may determine, up to a maximum amount equal to
15% of the Executive's then-current base salary.
Section 1.4 Benefits.
(a) Vacation. Executive shall be entitled to three weeks paid vacation
annually during the first two calendar years of his employment by the Company
and four weeks paid vacation during each calendar year thereafter. Any
vacation not used during any calendar year shall be forfeited, except that one
week's unused vacation may be carried forward to the year following the year in
which such vacation entitlement accrued.
(b) Life, Disability and Retirement Programs. Executive shall be
entitled to participate in any life, disability and retirement programs that
are generally offered to or provided for the senior management personnel of the
Company and its subsidiaries.
(c) Group Insurance. Executive shall be entitled to participate in such
group health and dental insurance programs (including spouse coverage) as may
from time to time be offered generally to all of the other members of the
senior management personnel of the Company and its subsidiaries.
Section 1.5 Stock Options.
(a) Option Grant. Upon the Effective Date of the IPO, the Company shall
grant to Executive options to purchase 66,229 shares of Common Stock (or such
other type of stock of the Company as is registered in the IPO). Such options
shall be granted at an exercise price equal to the IPO offering price for such
shares.
To the extent possible, all of the Options shall qualify as incentive stock
options under the Internal Revenue Code of 1986. All of the options to be
granted pursuant to this Section are referred to herein collectively as the
"Options" and shall be subject to the terms and conditions set forth below.
(b) Vesting and Exercise. One-third of the original amount of the
Options granted pursuant to Section 1.5(a) above shall vest on each of the
first three annual anniversaries of the date of grant. In addition, all
unvested Options shall vest and be immediately exercisable upon a Change in
Control (as defined below). All Options shall remain exercisable through the
tenth anniversary of the date of grant of such Option, at which time such
Options shall expire unless earlier terminated in accordance with the
provisions hereof.
(c) Return of Options and Repurchase of Shares.
(i) If the Executive voluntarily resigns his employment with the
Company for any reason other than Good Reason (as defined below), or is
terminated by the Company for Cause, all unvested options shall be canceled and
all then outstanding and exercisable Options shall remain exercisable in full
for a period of 120 days after the date of such written notice of voluntary
resignation or termination. At the Company's sole discretion, the Company may
purchase any unexercised Options from the Executive at a price per share equal
to the difference between the exercise price of such Options and the per share
Fair Market Value of the shares of Common Stock underlying such Options
determined as of or before the thirtieth (30th) day following the date such
written notice of voluntary resignation or termination was given with the Fair
Market Value of such shares of Common Stock to be determined in the manner set
forth in Subsection 1.5(d) below. Any such repurchase of shares by the Company
shall be accomplished within 30 days after such receipt of such notice of
resignation or termination.
(ii) In the event that Executive's employment with the Company shall
be terminated by the Company at any time without Cause or the Executive shall
resign for Good Reason, all then outstanding and unexercised Options shall vest
and become exercisable in full as of the date such notice of termination and
shall remain exercisable in full for a period of 120 days after the date such
notice to termination was given. At the Company's sole discretion the Company
may purchase any unexercised Options from the Executive at a price per share
equal to the difference between the exercise price of such Options and the per
share Fair Market Value of the shares of Common Stork underlying such Options
determined as of the date such written notice of voluntary resignation or
termination was given by the Company with the Fair Market Value of such shares
of Common Stock to be determined in the manner set forth in Subsection 1.5(e)
below. Any such repurchase of the shares of Common Stock shall be accomplished
within 30 days after the date such notice of termination was given by the
Company.
(d) The Fair Market Value of a share of Common Stock, on the date
specified by the Company shall mean (i) the closing sales price of the Common
Stock on that on the national securities exchange on which it is listed; (ii)
if the Common Stock is not traded on any national securities exchange, the
average of the closing high bid and low asked prices of the Common Stock on the
over-the-counter market on the day such value is to be determined, or in the
absence of closing bids on such day, the closing bids on the next preceding day
on which there were bids; (iii) if the Common Stock also is not traded on the
over-the-counter market, the fair market value as determined by an independent
financial appraiser acceptable to both the Company and Executive (or
Executive's personal representative) taking into account all relevant factors
including securities law or other transfer restrictions, minority discounts,
and other relevant factors.
(e) The Options granted hereunder shall be evidenced by a separate Option
Agreement to be entered into upon the date of the grant.
Section 1.6 Business Expenses. Executive shall be entitled to
reimbursement of all ordinary and necessary business expenses reasonably
incurred for business travel, communications (including cell phone and pager),
entertainment and meals in connection with the performance of Executive's
duties under this Agreement in accordance with the Company's established
policies for reimbursement of business expenses. The Company expects Executive
to attend and participate in continuing education seminars and courses with
respect to the staffing industry and business management related to his duties
and the Company will reimburse all ordinary and necessary expenses of such
attendance and participation. Such continuing education courses and seminars
will be scheduled in conjunction with the President of the Company to assure
coordination of schedules.
ARTICLE II
COVENANTS OF EXECUTIVE
Section 2.1 Confidentiality. Executive recognizes the interest of the
Company in maintaining the confidential nature of its proprietary and other
business and commercial information. In connection therewith, Executive
covenants that during the term of his employment with Company under this
Agreement, and for a period of one (1) year thereafter, Executive shall not,
directly or indirectly, except as authorized by the Board of Directors,
publish, disclose or use for his own benefit or for the benefit of a business
or entity other than the Company or otherwise, any secret or confidential
matter, or proprietary or other information not in the public domain that was
acquired by Executive during his employment, relating to the Company's, the
Company's or any of its subsidiaries' businesses, operations, customers,
suppliers, products, employees, financial affairs or industrial practices,
technology, know-how or intellectual property or other similar information (the
"Proprietary Information").
Executive will abide by the Company's policies and regulations, as
established from time to time, for the protection of its Proprietary
Information. Executive acknowledges that all records, files, data, documents
and the like relating to suppliers, customers, costs, prices, systems, methods,
personnel, technology and other materials relating to the Company or its
affiliated entities shall be and remain the sole property of the Company and/or
such affiliated entity and shall, upon the request of the Company, turn over
all copies of such Proprietary Information to the Company (together with a
written statement certifying as to his compliance with the foregoing).
Section 2.2 Non-Solicitation of Customers and Non-Competition. During
the term of his employment with the Company, and for a period of one (1) year
after any termination of the Executive's employment for Cause or the
resignation of the Executive for any reason other than Good Reason (as defined
below), Executive shall not directly or indirectly, through one or more
intermediaries or otherwise, solicit, direct or appropriate, or attempt to
solicit, direct or appropriate any individual or entity which was, at the time
of termination of Executive's employment, a customer or client of the Company
for the purpose of providing a service or product to such customer or client
which is the same type of service or product offered or provided by the Company
at the time of termination of Executive's employment, with the Company.
During the Executive's employment with the Company, and for the two (2)
year period following the termination of Executive's employment with the
Company for Cause or the resignation of the Executive for any reason other than
Good Reason (as defined below), Executive shall not, without the prior written
consent of the Board of Directors, which consent may be withheld at the sole
discretion of the Board of Directors, engage or participate in, as a business
executive or equity owner, the management or conduct of any business or
enterprise that directly competes in any geographical area with any line of
business in which the Company was engaged in at the time of termination of
Executive's employment with the Company; provided, however, that nothing in
this Section 2.2 shall prohibit Executive from acquiring or holding, for
investment purposes only, less than five percent (5%) of the outstanding
publicly traded securities of any corporation which may compete directly or
indirectly with the Company.
Section 2.3 Non-Solicitation of Employees. During the term of
Executive's employment with the Company, and for a period of one (1) year
following the termination of Executive's employment with the Company for Cause
or the resignation of the Executive for any reason other than Good Reason (as
defined below) (the "Nonsolicitation Period"), Executive shall not, directly or
indirectly, through one or more intermediaries or otherwise, employ, induce,
solicit for employment, or assist others in employing, inducing or soliciting
for employment any individual who is at any time during the Nonsolicitation
Period an employee of the Company for the purpose of providing services that
are the same or similar to the types of services offered or engaged in by the
Company at the time of termination of Executive's employment with the Company.
Section 2.4 Trade Secrets. The Executive shall not, at any time, either
during the term of his employment or after any termination of employment, use
or disclose any Trade Secrets (as defined under applicable law) of the Company
or its subsidiaries, except in fulfillment of his duties as the Executive
during his employment, for so long as the pertinent information or data remain
Trade Secrets, whether or not the Trade Secrets are in written or tangible
form.
ARTICLE III
TERMINATION OF EMPLOYMENT
Section 3.1 Termination by Company. Executive's employment may be
terminated by the Company by giving notice during the term of this Agreement
upon the occurrence of one or more of the following events:
(a) Executive's death or disability which renders Executive
incapable of performing his duties for more than one hundred twenty (120)
calendar days (termination under this Section 3.1(a) shall be deemed
termination without Cause);
(b) for any reason following a determination by the Board of
Directors to terminate Executive's employment (termination under this Section
3.1(b) shall be deemed termination without Cause); or
(c) "for Cause", which for purposes of this Agreement shall mean
that the Executive shall have:
(i) committed an intentional act of fraud, embezzlement or
theft in connection with his duties or in the course of his employment with the
Company which has a material adverse effect upon the Company;
(ii) inflicted intentional wrongful material damage to any
material asset of the Company or the Company;
(iii) intentionally and wrongfully violates Article II of this
Agreement, which violation has a material adverse effect upon the Company;
(iv) been convicted of a felony or any similar crime carrying
a prison term of at least one year (regardless of whether imprisonment is
actually imposed); or
(v) a habitual and debilitating use of alcohol or drugs.
(vi) failed to meet performance expectations, as determined
and articulated by the Company's Board of Directors; provided, however, that in
the event of this subsection (vi) being the sole reason for a termination for
Cause, Executive shall have the cure provisions and rights provided for in
Section 3.1(d) hereof.
(d) In the event of a determination by the Company's Board of
Directors that the Executive has failed to meet performance expectations, the
Company shall furnish to Executive in writing a notice of proposed termination
setting forth a specific statement of the deficiencies in his performance.
Executive shall then have a period of ninety (90) days after the giving of such
written notice of proposed termination by the Company in which to attempt to
effect a cure of the specified deficiencies. If at the end of such ninety (90)
day period no such cure has been effected to the reasonable satisfaction of the
Board of Directors of the Company, in their sole discretion, then Executive's
employment shall be terminated as of the end of such ninety (90) day period.
The Company shall be obligated to provide to Executive only one such notice of
proposed termination, and if subsequent to effecting a cure of specified
deficiencies the Executive is determined by the Board of Directors to have
again failed to meet performance expectations, then his employment may be
terminated immediately upon the Company's giving of notice of termination to
Executive which specifies his deficiencies in performance.
Section 3.2 Good Reason. For purposes of this Agreement, "Good Reason"
shall mean, without the express written consent of Executive, the occurrence of
any of the following events unless such events are fully corrected within 30
days following written notification by Executive to the Company that he intends
to terminate his employment hereunder for one of the reasons set forth below:
(a) a material breach by the Company of any material provision of
this Agreement, including, but not limited to, the assignment to Executive of
any duties inconsistent with Executive's position in the Company or a material
adverse alteration in the nature or status of Executive's responsibilities;
(b) the Company's requiring the Executive to be based anywhere other
than the Philadelphia metropolitan area; or
(c) the occurrence of a "Change in Control" as defined below.
For purposes of this Agreement a "Change in Control" shall mean an event
as a result of which: (i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 30% of the total voting power of the voting stock of
the Company; (ii) the Company consolidates with, or merges with or into another
corporation or sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of its assets to any person or any corporation
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding voting stock of the Company
is changed into or exchanged for cash, securities or other property, other than
any such transaction where (A) the outstanding voting stock of the Company is
changed into or exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including voting stock) or
other property, and (B) the holders of the voting stock of the Company
immediately prior to such transaction own, directly or indirectly, not less
than 30% of the voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) individuals who at the date of the
Merger constitute the Board of the Company (together with any new directors
whose election by such Board or whose nomination for election by the
stockholders of the Company was approved by a vote of 66-2/3% of the directors
then still in office who are either directors at the date of the Merger or
whose election or nomination for election was previously so approved) ceased
for any reason to constitute a majority of the Board of the Company then in
office; or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation, provided, however, that a Change in Control shall not include the
Merger.
Section 3.3 Severance. For purposes of this Agreement, Executive's
entitlement to any severance payments upon termination of his employment shall
be as set forth below:
(a) Termination Without Cause.
(i) If Executive is terminated without Cause prior to the IPO,
Executive shall be entitled to severance pay of $50,000, payable in a lump sum
on the date of such termination;
(ii) If Executive is terminated without Cause or resigns for
Good Reason after the IPO or if the Executive resigns for Good Reason at any
time due to a Change in Control, Executive shall be entitled to severance pay
of a lump sum equal to three times his annual salary then in effect.
(b) Voluntary Termination. Executive shall not receive any
severance pay if he voluntarily resigns his employment with the Company for any
reason other than Good Reason unless such severance pay is approved by the
Board of Directors of the Company in its sole discretion. Executive shall
provide a minimum of thirty (30) days prior notice to the President of his
resignation. In the event Executive shall provide thirty (30) days prior
written notice of his intent to resign, the Company may accept such resignation
effective as of any date during such thirty (30) day period as the Company
deems appropriate, provided that Executive shall receive from the Company his
salary and be entitled to participate at the Company's expense in any Company
sponsored benefit programs in which he was a participant as of the effective
date of his resignation for the duration of such thirty (30) day period.
(c) For Cause. Executive shall not be entitled to any severance pay
whatsoever if his employment is terminated "for Cause" pursuant to Section
3.1(c) of this Agreement, unless severance pay is approved by the Board of
Directors of the Company in its sole discretion, provided, however, that the
Executive shall receive such annual salary that is accrued but unpaid up to the
date of such termination for Cause. If termination is for Cause pursuant to
Section 3.1(b)(vi), and is other than pursuant to a Change in Control, then
Executive shall be entitled to severance equal to pay for the remainder of the
then current term of this Agreement, or equal to one year's salary at his then
current rate, whichever is greater.
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes
and withholdings as shall be required pursuant to any applicable law, rule or
regulation.
Section 4.2 Notice. For purposes of this Agreement, all communications
including, without limitation, notices, consents, requests or approvals,
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or five (5) business days after having been
mailed by United States registered mail or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive office or to Executive at
his principal residence, or to such other address as any party may have
furnished to the other in writing and in accordance herewith, except the
notices of change of address shall be effective only upon receipt.
Section 4.3 Governing Law. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania, without giving effect to the principles of
conflict of laws of such Commonwealth.
Section 4.4 Validity. It is not the intent of any party hereto to
violate any public policy of any jurisdiction in which this Agreement may be
enforced. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to any other person or circumstances shall not be affected, and
the provision so held to be invalid, unenforceable or otherwise illegal shall
be reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal; provided, however, if the provision so held to be
invalid, unenforceable or otherwise illegal constituted a material inducement
to a party's execution and delivery of this Agreement, such provision shall not
be reformed unless prior to any reformation that party agrees to be bound by
the reformation.
Section 4.5 Entire Agreement. This Agreement supersedes any other
agreements, oral or written, between the parties with respect to the subject
matter hereof, and contains all of the agreements and understandings between
the parties with respect to the employment of Executive by the Company. Any
waiver or modification of any term of this Agreement shall be effective only if
it is set forth in a writing signed by all parties hereto.
Section 4.6 Successors and Binding Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and any Successor of or to the Company, but shall not otherwise be
assignable or delegable by the Company. "Successor" shall mean any successor
in interest, including, without limitation, any entity, individual or group of
persons acquiring directly or indirectly all or substantially all of the
business or assets of the Company, as the case may be, whether by sale, merger,
consolidation, reorganization or otherwise.
(b) The Company shall require any Successor to agree at the time of
becoming a Successor to perform this Agreement to the same extent as the
original parties would be required if no succession had occurred.
(c) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors, administrators,
heirs, distributes and legatees.
(d) This Agreement is personal in nature and neither of the parties
shall, without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly provided
in this Section 4.6.
Section 4.7 Captions. The captions in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
Section 4.8 Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive, the Company. No waiver by a party
hereto at any time of any breach by another party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provision or conditions at
the same or at any prior or subsequent time.
Section 4.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be in original but all of which
together will constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
"Company":
ICCE, Inc. "Executive"
By:/s/ Xxxx Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
Signature Xxxxxx X. Xxxxxxxxx
Xxxx Xxxxxxxxx
Print Name
President
Print Title
