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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 27 day of
August, 1995, by and between Corporate Child Care, Inc., a Tennessee
corporation (the "Company"), and Xxxxxx Xxxxx (the "Employee").
WHEREAS, the Employee and the Company desire to establish an
employment relationship and to set forth in an agreement the terms and
conditions of such employment.
NOW, THEREFORE, in consideration of the premises hereof and of the
mutual promises and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
1. Employment and Term of Employment. The Company hereby agrees
to employ the Employee, and the Employee hereby agrees to serve the Company, on
the terms and conditions set forth herein for the period commencing on the date
hereof and expiring on August 27, 2000 (the "Expiration Date"), unless sooner
terminated as hereinafter set forth.
2. Positions and Duties. The Employee shall serve as the
Chairman of the Board of Directors and President of the Consulting Division for
the Company. The Employee shall devote substantially all his working time and
efforts, not to be less than 40 hours per week on average, to the business and
affairs of the Company. Unless the Employee and the Company agree otherwise,
the Employee may continue to reside in Morristown, New Jersey. The Employee
shall use his best efforts to advance the best interests of the Company, and
shall not engage in outside business activities which interfere with the
performance of his duties hereunder.
3. Compensation.
(a) Base Salary. The Employee shall be paid a base
salary at the rate comparable to that of the other executive officers
of the Company at the time of Closing ("Base Salary"), which may be
revised from time to time based on a review of Company and Employee
performance (but in no event below the amount stated above during the
term of this Agreement), payable in substantially equal monthly
installments during the period of the Employee's employment hereunder.
(b) Insurance. Effective August 27, 1995, the Company
shall provide the Employee with insurance comparable to, and on the
same terms as, the insurance provided to similar employees of the
Company.
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(d) Company Stock Options. Effective August 27, 1995
and subject to the approval of the Board of Directors and shareholders
of the Company, Employee will receive an initial grant of 500,000
options to purchase the Company's common stock at an exercise price of
$5.00 per share (the "Options"). The Options will be non-qualified
options and will expire August 27, 2005. The Options will vest at a
rate of 100,000 shares per year over a five (5) year vesting period;
provided however, that if Employee is terminated by the Company
without cause within five (5) years from the date of grant, all
Options will become fully vested at the time of termination and will
remain in effect until their expiration. Additionally, the Employee
shall be eligible to participate in the Company's 1987 Stock Option
Plan, a copy of which is attached hereto as Exhibit B.
(e) Other Benefits. Effective August ___, 1995, the
Company shall provide the Employee with other benefits, including but
not limited to, vacation, sick leave and holidays, comparable to those
provided to similar employees of the Company.
(f) Bonus. The Employee shall be eligible to earn an
annual performance based bonus which shall be defined by Company
management and approved by the Executive Committee.
4. Termination
(a) Disability. If, as a result of the Employee's
incapacity due to physical or mental illness, the Employee shall have
been absent from his duties hereunder on a full time basis for
either: (i) 20 consecutive business days (excluding vacation days)
during any 12-month period or (ii) 30 business days in the aggregate
during any 12-month period, the Company may terminate the Employee's
employment hereunder.
(b) Termination Upon Death. If the Employee should die
during the term of this Agreement, the Company's obligations under
this Agreement shall cease, except those obligations set forth in
Section 5(b) hereof, and the Employee's employment shall be deemed
terminated as of the end of the month during which death occurs.
(c) Termination by the Company. The Company may
terminate the Employee's employment hereunder at any time for Cause or
for any other reason. For the purposes of this Agreement, the Company
shall have "Cause" to terminate the Employee's employment hereunder
upon (i) willful acts of dishonesty or fraud by the Employee which are
materially harmful to the Company; (ii) the Employee's willful failure
faithfully to perform the duties of his office, after written notice
and a 30-day opportunity to cure; (iii) any breach of the Employee's
fiduciary duty to the Company; or (iv) the willful violation by the
Employee of the provisions of Section 7 hereof.
(d) Termination by the Employee. The Employee may
terminate his employment hereunder (i) at any time if in his sole
judgment his health should become impaired to an
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extent that makes the continued performance of his duties hereunder
hazardous to his physical or mental health or his life, or (ii) upon
60 days' written notice for any other reason.
(e) Notice of Termination. Any termination by the
Company pursuant to subsection (a) or (c) above or by the Employee
pursuant to subsection (d) above shall be communicated by written
notice of termination to the other party hereto.
(f) Property of the Company. The Employee agrees that
upon the termination of his employment with the Company for any reason
he will surrender to the Company all lists, books, records and similar
materials, and all copies thereof in his possession and will also
return to the Company all other property of the Company which has come
into her possession while employed by the Company.
5. Compensation Upon Termination or During Disability.
(a) During any period in which the Employee fails to
perform his duties hereunder as a result of incapacity due to physical
or mental illness, the Employee shall continue to receive his Base
Salary until the Employee's employment is terminated pursuant to
Section 4(a) hereof, or until the Employee terminates his employment
pursuant to Section 4(d)(i) hereof, whichever first occurs. The
Company shall then have no further obligations to the Employee under
this Agreement.
(b) If the Employee's employment shall be terminated for
Cause or if the Employee dies or if the Employee terminates his
employment for any reason other than pursuant to Section 4(d)(i), the
Company shall pay the Employee his Base Salary and shall maintain in
effect all of Employee's benefits set forth in Section 3(c) of this
Agreement, through the date on which his employment is terminated at
the rate in effect at the time notice of termination is given. The
Company shall then have no further obligations to the Employee under
this Agreement except that in the event of termination by death, the
Employee's estate or beneficiaries, as the case may be, shall be paid
such amounts as may be payable under the Company's life insurance
policies, if any, then in effect for the Company's employees.
(c) If prior to August 27, 1998, the Company terminates
the Employee's employment for any reason, other than for Cause or
pursuant to Sections 4(a) and 4(b) above, the Company shall pay the
Employee his Base Salary and maintain in effect all of the Employee's
benefits set forth in Section 3(c) of this Agreement from the date on
which his employment is terminated until August 27, 1998 at the rate
in effect at the time notice of termination is given. The Company
shall then have no further obligations to the Employee under this
Agreement. If following August 27, 1998, the Company terminates the
Employee's employment for any reason, other than for Cause or pursuant
to Sections 4(a) and 4(b) above, the Company shall pay the Employee
his Base Salary and maintain in effect all of the Employee's benefits
set forth in Section 3(c) of this Agreement for a period of six months
from the date on which his employment is terminated at the rate in
effect at the time notice
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of termination is given. The Company shall then have no further
obligations to the Employee under this Agreement. Notwithstanding the
foregoing, any compensation pursuant to this Section 5(c) owed the
Employee following termination shall at a minimum be paid for a period
of six months from the date on which his employment his employment is
terminated at the rate in effect at the time notice of termination is
given.
6. Binding Agreement. This Agreement and all obligations of the
Company hereunder shall be binding upon the successors and assigns of the
Company. This Agreement and all rights of the Employee hereunder shall inure
to the benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees.
7. Confidentiality. During the period of employment pursuant to
the terms of this Agreement, Employee shall not, without the prior written
consent of the Company, disclose to any person other than (a) to a person to
whom disclosure is necessary or appropriate in connection with the performance
by Employee of his duties as an employee of the Company or its subsidiaries or
affiliates, or (b) (subject to the Company's ability to obtain a protective
order from a court of competent jurisdiction and the Company's agreement in
writing to indemnify Employee for liabilities and expenses she incurs by virtue
of such nondisclosure) to any person upon the order or direction of any court,
administrative body, or quasi-governmental body, any confidential information
obtained by Employee while in the employ of the Company with respect to any of
the Company's services, products, improvements, designs or styles, customers,
methods of marketing or distribution, systems, procedures, plans, proposals,
policies or methods.
8. Specific Performance. The Employee acknowledges and agrees
that compliance with Section 7 hereof is necessary to protect the business,
goodwill and proprietary interests of the Company and recognizes that, in the
event of a breach of Section 7 hereof by the Employee, the Company would be
irreparably harmed and that monetary damages would be an inadequate remedy in
favor of the Company. Accordingly, the Employee and the Company agree that in
the event of such a breach, the Company shall be entitled, in addition to any
other remedies and damages available, to injunctive relief against the
Employee, his partners, agents, servants, employers, employees and all persons
acting for or with him.
9. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed as
follows:
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If to the Employee:
Xxxxxx Xxxxx
President
RCCM
00 Xxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
If to the Company:
Corporate Child Care, Inc.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0X
Xxxxxxxxx, XX 00000
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
10. Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or government regulation or ruling.
11. Governing Law. This Agreement shall be construed according to
the laws of Tennessee, without giving effect to the principles of conflicts of
laws of such State. If any controversy or claim arising out of this agreement
results in litigation between the parties to this agreement, such litigation
shall be prosecuted in the courts of the State of Tennessee or in federal
courts located within the State of Tennessee. The parties to this agreement
hereby irrevocably consent to the jurisdiction of the courts of the State of
Tennessee and the federal courts located within the State of Tennessee in any
action or proceeding arising out of or relating to this agreement. This
provision has been bargained for at arm's length and is the result of bilateral
negotiations.
12. Amendment; Modification; Waiver. This Agreement may not be
amended except by the written agreement of the parties hereto. No provisions
of this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the Employee and
the Company. No waiver by either party hereto at any time of any breach by the
other 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 provisions or conditions at the same or at any prior or
subsequent time.
13. Binding Effect. This Agreement and the services to be
rendered by the Employee hereunder are personal in nature and neither this
Agreement nor any rights or obligations pursuant to this Agreement may be
assigned, transferred or delegated without the consent of the Company and the
Employee. Without limiting the generality of the foregoing, the Employee's
right to receive payments hereunder shall not be assignable, transferable or
delegable, whether by pledge, creation
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of a security interest or otherwise, other than a transfer by will or by the
laws of descent and distribution and, in the event of any attempted assignment
or transfer contrary to this paragraph, the Company shall have no obligation
and/or liability to pay any amount so attempted to be assigned, transferred or
delegated.
14. No Waiver. No delay or omission by the parties in exercising
any right, remedy or power hereunder or existing at law or in equity shall be
construed or a waiver thereof, and my such right, remedy or power may be
exercised by the parties from time to time and as often as may be deemed
expedient or necessary by the parties hereto.
15. Attorney's Fees. If the Company must take action to enforce
or defend its rights under this Agreement, the Company shall be entitled to
recover its costs and reasonable attorney's fees in addition to any other
relief granted in such action.
16. Entire Contract. This Agreement constitutes the entire
agreement and supersedes all other prior agreements, employment contracts and
understandings, both written and oral, express or implied with respect to the
subject matter of this Agreement.
17. Severability. Any invalid or unenforceable provision
hereof shall be deemed severed from this Agreement and the balance of the
Agreement shall be construed and enforced as if the Agreement did not contain
the particular provision held to be invalid or unenforceable.
18. Declaration. Employee hereby declares that he has read the
terms of this Agreement, understands and fully accepts the terms hereof and
executes this Agreement as her free and voluntary act. Employee hereby
represents that, in signing this Agreement, she is relying upon only those
representations, warranties and covenants contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first above written.
COMPANY:
CORPORATE CHILD CARE, INC.
By: /s/ Xxxxxxxxxx X. Xxxxxx
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Title: President and CEO
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EMPLOYEE
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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