Exhibit 10.12
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of September 23, 2002 (the
"Effective Date") between Xxxxxx X. Xxxxxxx ("Executive") and TEAM America,
Inc., an Ohio corporation (the "Company").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows:
1. Employment and Duties. On the terms and subject to the conditions
set forth in this Agreement, the Company agrees to employ Executive as its Chief
Financial Officer and Treasurer to render such services as would be customary
for such position and to render such other services and discharge such other
responsibilities as the Company's Board of Directors or the Chief Executive
Officer may, from time to time, stipulate.
2. Performance. Executive accepts the employment described in Section 1
of this Agreement and agrees to faithfully discharge his duties and devote
adequate professional time and effort to the performance of the services
described therein. Nothing in this Agreement, however, shall preclude the
Executive from devoting a reasonable amount of his time and efforts to civic,
community, charitable, professional and trade association affairs and matters.
3. Term. Executive's employment under this Agreement (the "Employment
Period") shall commence as of the Effective Date and continue until terminated
by either party. Executive's employment is "at will," so that it may be
terminated by either party at any time, with or without cause. On termination of
Executive's employment, Executive's entitlement to any severance pay shall be
governed by Section 7 hereof.
4. Compensation.
4.1 Salary. For all the services to be rendered by Executive hereunder,
the Company agrees to pay, during the Employment Period, a base salary at the
rate of not less than $180,000 ("Base Salary") beginning April 1, 2003, per
annum payable weekly or otherwise according to the Company's regular pay
schedule for salaried employees. The Company and Executive agree that the salary
provided herein shall be subject to annual review for cost of living and merit
factors, with any adjustments being mutually agreed between the Company and
Executive.
4.2 Incentive Compensation. With respect to each fiscal year of the
Company during the Employment Period, the Company will pay Executive a bonus of
up
to 50% of the Base Salary set forth in Paragraph 4.1, or as thereafter in
effect, based upon performance as evaluated jointly by the Chief Executive
Officer and Chair of the Audit Committee. Company will award Executive with
options to acquire not less than 25,000 qualified shares of its stock pursuant
to its Incentive Stock Option Plan ("ISO Shares") for 2002, to be issued at fair
market value, with vesting over four (4) years, and 20,000 non-qualified ISO
Shares, to be issued at fair market value, which are immediately vested;
provided nothing contained herein shall obligate the Company to continue the
Executive's employment for any period of time nor change in any way the "at
will" nature of Executive's employment.
4.3 Vacation. Executive shall be entitled to take four (4) weeks of
vacation, with pay, during each year of service under this Agreement. Vacation
allowances shall cumulate from year to year based upon Company's standard
vacation policy.
4.4 Other Benefits. Except as otherwise specifically provided herein,
during the Employment Period Executive shall be eligible for all non-wage
benefits the Company provides generally for its other corporate officers, plus
an automobile allowance consistent with that provided to senior executives.
5. Business Expenses.
5.1 Reimbursement. The Company shall reimburse Executive for the
reasonable, ordinary, and necessary expenses incurred by him in connection with
the performance of his duties hereunder, including but not limited to, ordinary
and necessary travel expenses, entertainment expenses and automobile allowance.
5.2 Accounting. Executive shall provide the Company with an accounting
of his expenses, which accounting shall clearly reflect which expenses are
reimbursable by the Company. Executive will provide the Company with such other
supporting documentation and other substantiation of reimbursable expenses as
will conform to Internal Revenue Service or other requirements.
6. Covenants of Executive.
6.1 Non-Competition Provisions. The Executive and the Company agree
that Company has protectable, private and confidential interests including but
not limited to marketing strategies, financial information, good will,
customers, customer lists, specific customer needs and contacts, current and
future business plans and the existence and terms of this Agreement, and as such
during the Employment Period the Executive shall not, without the written
consent of the Company, engage in, be employed by, act as a consultant for or
otherwise be compensated by, be a director of or own an equity interest in, any
business which is engaged in employee leasing, the provision of PEO or ASO
services, payroll and payroll tax service, employee benefits, or job placement
products or services or any other business which would tend to compete with the
Company business or cause any Company Client to cancel its relationship with the
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Company in order to purchase such products or services, nor disclose or use for
his own benefit any of the protectable, private or confidential information
belonging to or pertaining to the Company or its affiliates to any party without
the prior written consent of the Company.
6.2 Non-Solicitation During and for a period (3) three years following
the Employment Period, Executive shall not, as an employee, agent, owner,
contractor or in any other capacity, acting alone or in concert with others (i)
solicit the business of any customer or prospect of the Company or of any
businesses which were customers or prospects of the Company within two (2) years
preceding the termination of the Employment Period (collectively, "Company
Clients"); nor (ii) do business with or render services to any Company Client in
connection with any business similar to the business of the Company or its
subsidiaries, including, but not limited to, any business engaged in employee
leasing, the provision of PEO or ASO services, payroll and payroll tax service,
employee benefits, or job placement products or services or any other business
which would tend to compete with the Company business or cause any Company
Client to cancel its relationship with the company in order to purchase such
products or services, provided such restriction shall not prevent Executive from
being employed by any such entity so long as Executive observes the other
restrictions contained in this Agreement; nor (iii) solicit, hire or interfere
in any way with the employment relationship between the Company and any of its
employees. This obligation shall be in addition to any obligation imposed on the
Agent under any confidentiality agreement with the Company.
6.3 Confidentiality. The Executive agrees and acknowledges that, by
reason of the nature of his duties as an officer and employee, he will have or
may have access to and become informed of confidential and secret information
which is a competitive asset of the Company ("Confidential Information"),
including without limitation any lists of client organizations or worksite
employees, financial statistics, research data or any other statistics and plans
contained in profit plans, capital plans, critical issue plans, strategic plans
or marketing or operation plans or other trade secrets of the Company and any of
the foregoing which belong to any person or company but to which the Executive
has had access by reason of his employment relationship with the Company. The
Executive agrees faithfully to keep in strict confidence, and not, either
directly or indirectly, to make known, divulge, reveal, furnish, make available
or use (except for use in the regular course of his employment duties) any such
Confidential Information. The Executive acknowledges that all manuals,
instruction books, price lists, information and records and other information
and aids relating to the Company's business, and any and all other documents
containing Confidential Information furnished to the Executive by the Company or
otherwise acquired or developed by the Executive, shall at all times be the
property of the Company. Upon termination of the Employment Period, the
Executive shall return to the Company any such property or documents which are
in his possession, custody or control, but his obligation of confidentiality
shall survive such termination of the Employment Period until and unless any
such Confidential Information shall have become, through no fault of the
Executive, generally known to the trade. The obligations of the Executive under
this subsection are in addition to, and not
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in limitation or preemption of, all other obligations of confidentiality which
the Executive may have to the Company under general legal or equitable
principles.
7. Termination.
7.1 Termination Without Cause; Severance.
(a) In the event Executive's employment with the Company is terminated
by the Company without cause (as defined below), or if Executive's employment is
terminated by reason of his death or disability, Executive shall be entitled to
severance pay in the amounts described in section 7.1 (b) below ("Severance")
plus any bonus payable under paragraph 4.2. with respect to such calendar year.
(b) If Executive's employment is terminated without cause: (i) within
six (6) months following a "change of control," and not by death or disability,
Executive shall receive Severance equal to one (1) year's Base Salary plus a
bonus equal to 50% of his Base Salary in effect at the time of termination,
payable in 12 equal monthly installments commencing on the last day of the month
following the month in which Executive's employment is terminated (the
"Severance Period"); but (ii) if Executive's employment is terminated without
cause in the absence of such "change of control," Executive shall receive
Severance equal to six (6) months Base Salary in effect at the time of
termination, payable in 6 equal monthly installments as provided above (also,
the "Severance Period"). As used herein, "change of control" means a sale of
substantially all of the assets of the Company or the merger or consolidation of
the Company with another entity on terms whereby the Company is not the
surviving entity or the acquisition by any person or entity of more than 50% of
the voting stock of the Company or a change in management mandated in connection
with a debt or equity infusion into the Company. The foregoing notwithstanding,
if following a change of control, Executive is offered a substantially similar
position at substantially similar compensation, but Executive rejects such
offer, then Executive shall not be entitled to Severance.
(c) In the event Severance is payable hereunder, the Employment Period
shall be deemed to include the time during which Severance is payable for
purposes of Section 6 hereof.
(d) In the event Executive breaches any obligation to the Company under
Section 6, any obligation to pay Severance shall forthwith terminate and
Executive shall, in addition to all other remedies available to the Company,
reimburse Company for any Severance previously paid to him.
7.2 Termination With Cause. The Company shall have the option to
terminate the Employment Period, effective upon written notice of such
termination to Executive, for good cause ("Cause"), which shall consist of any
of the following: (a) material breach by Executive of his covenants,
responsibilities, and obligations under this Agreement; (b) commission by
Executive of theft or embezzlement of Company property or any other acts of
dishonesty; (c) commission by Executive of a crime
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resulting in injury to the business, property or reputation of the Company or
commission of other significant activities harmful to the business or reputation
of the Company; or (d) insubordination; provided Executive's refusal to take
actions which he reasonably and in good faith believes are materially adverse to
the interests of the Company and its shareholders shall not be deemed to be good
cause for termination. In the event of termination of the Employment Period for
Cause, Executive shall not be entitled to receive any severance payments under
Section 7.1 hereof.
7.3 Surrender of Properties. Upon termination of Executive's employment
with the Company, regardless of the cause therefor, Executive shall promptly
surrender to the Company all property provided him by the Company for use in
relation to his employment, and, in addition, Executive shall surrender to the
Company any and all sales materials, lists of clients and prospective clients,
price lists, files, records, or other materials and information of or pertaining
to the Company or its clients or prospective clients or the products, business,
and operations of the Company.
7.4 Survival of Covenants. The covenants of Executive set forth in
Section 6 of this Agreement shall survive the termination of the Employment
Period or termination of this Agreement, regardless of the cause therefor.
8. Indemnification. The Company shall indemnify and hold harmless the
Executive to the fullest extent permitted by the Code of Regulations of the
Company with respect to any claim asserted by any third party arising from or
relating to any action or inaction of Executive while serving the Company.
9. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns. The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all its assets to expressly
assume and agree to perform this agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place.
10. General Provisions.
10.1 Notice. Any notice required or permitted hereunder shall be made
in writing (a) either by actual delivery of the notice into the hands of the
party thereunder entitled, or (b) by the mailing of the notice in the United
States mail, certified or registered mail, return receipt requested, all postage
prepaid and addressed to the party to whom the notice is to be given at the
party's respective address set forth below, or such other address as the parties
may from time to time designate by written notice as herein provided.
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As addressed to the Company: TEAM America, Inc.
000 X. Xxxxxx Xxxxxx Xx.
Xxxxxxxxxxx, Xxxx 00000
Attention: S. Cash Xxxxxxxxx
As addressed to Executive: Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxxxx Xx.
Xxxxxx, XX 00000
The notice shall be deemed to be received in case (a) on the date of its actual
receipt by the party entitled thereto and in case (b) on the date of its
mailing.
10.2 Amendment and Waiver. No amendment or modification of this
Agreement shall be valid or binding upon the Company unless made in writing and
signed by an officer of the Company duly authorized by the Board of Directors or
upon Executive unless made in writing and signed by him. The waiver by the
Company of the breach of any provision of this Agreement by Executive shall not
operate or be construed as a waiver of any subsequent breach by him.
10.3 Governing Law. The validity and effect of this Agreement and the
rights and obligations of the parties hereto shall be construed and determined
in accordance with the laws of the State of Ohio.
10.4 Entire Agreement. This Agreement contains all of the terms agreed
upon by the parties with respect to the subject matter hereof and supersedes all
prior agreements, arrangements and communications between the parties dealing
with such subject matter, whether oral or written, including, without
limitation, the Letter Offer dated December 4, 2001.
10.5 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the transferees, successors and assigns of the Company,
including any company or corporation with which the Company may merge or
consolidate.
10.6 Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved exclusively by arbitration in
Franklin County, Ohio under the auspices and in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
10.7 Costs of Enforcement. In the event of any suit or proceeding
seeking to enforce the terms, covenants, or conditions of this Agreement, the
prevailing party shall, in addition to all other remedies and relief that may be
available under this Agreement or applicable law, recover his or its reasonable
attorneys' fees and costs as shall be determined and awarded by the court or
arbitrator.
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10.8 Headings. Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.
10.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together, shall be and constitute one and the same instrument.
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11. Compensation Committee Approval. Executive understands,
acknowledges and agrees that this Agreement and the terms herein are expressly
subject to the approval of the Compensation Committee of the Board of Directors
and the signature of the CEO below is not binding until and unless the
Compensation Committee approves the terms of this Agreement and the Agreement is
countersigned by the Chairperson of the Compensation Committee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date and year first written above.
TEAM AMERICA, INC.
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By: S. Cash Xxxxxxxxx
Title: CEO
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Xxxxxx X. Xxxxxxx
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Compensation Committee Chairperson
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