Exhibit 10.1
EMPLOYMENT AGREEMENT
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Employment Agreement, dated as of and effective June 19, 2007, and between
ATC HEALTHCARE INC., a Delaware Corporation ("ATC" or the "Corporation"), and
Xxxxx Xxxxxxx who resides at 00000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxxx, XX
00000 (Executive").
WHEREAS, ATC wishes to secure the services of the Executive on the terms
and conditions set forth below;
AND WHEREAS, the Executive is willing to accept employment with ATC on such
terms and conditions.
NOW, THEREFORE, in consideration of their mutual promises and other
adequate consideration, ATC and the Executive do hereby agree as follows:
1. EMPLOYMENT. ATC will employ the Executive as Senior Vice President,
Chief Financial Officer (CFO) and Treasurer, in accordance with the terms and
provisions of this Agreement.
2. DUTIES. The Executive shall be responsible for the management of all
aspects of the financial functions and related responsibilities of ATC. The
Executive shall report directly to the Chief Executive Officer or such other
Senior Executive of the Corporation and/or the Board of Directors. The Executive
shall devote his full business time, attention and skill to the performance of
his duties hereunder and to the advancement of the business and interests of
ATC.
3. TERM. This Agreement shall be effective June 19, 2007, and shall remain
in effect until June 18, 2010, unless terminated earlier pursuant to the terms
hereof. This Agreement shall automatically renew for an additional Term of one
year unless either party notifies the other that it does not intend to renew
this Agreement within 60 days prior to its expiration.
4. COMPENSATION.
a) Salary. The Executive shall be paid a salary of $230,000 per annum
during the period ending June 18, 2008 payable in the same frequency
as provided to other Executives of ATC. The Executive's salary will be
increased by ATC on June 19, 2008 to $240,350. The Executive's salary
will be increased on June 19, 2009 to $251,165 per annum.
b) Bonus. Executive shall be entitled to participate in any bonus
program, which the Corporation may make available to its senior
executive employees. Executive shall be entitled to participate in
such program(s) so long as Executive serves as an employee of the
Corporation, subject to the terms and conditions of any such program
as the then current policies and procedures of the Corporation
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c) Benefits. The Executive shall be eligible to receive and
participate in all health, medical or other insurance benefits that
ATC provides or makes available to its executive employees. The
Executive may enroll in the ATC health program effective upon the
first date of employment.
d) Expenses. ATC shall reimburse the Executive for all reasonable and
necessary expenses, including professional dues associated with
belonging to the Virginia Board of Accounting, the American Institute
of Certified Public Accountants and CPE credits to maintain Licensure,
upon submission by the Executive of receipts, accounts or such other
documents reasonably requested by ATC.
e) Car Allowance. The Executive will be paid a car allowance of $650
per month.
f) Vacation. The Executive shall be entitled to twenty-four (24)
business days of paid time off (in addition to holidays recognized by
the Company) during each twelve-month period of employment during the
term.
g) Travel Allowance. From June through November 2007, Executive will
be paid a $900 per month travel allowance for travel to and from
Virginia.
5. TERMINATION: RIGHTS AND OBLIGATIONS UPON TERMINATION.
a) If the Executive dies during the Term, then the Executive's
employment under this Agreement shall terminate. In such event, the
Executive's estate shall be entitled only to compensation and expenses
accrued and unpaid as at the date of the Executive's death. The Estate
shall have a period of three (3) months from the date of termination
to exercise any stock options that had vested prior to the death of
the Executive.
b) If, as a result of the Executive's incapacity due to physical or
mental illness, whether or not job related, the Executive is absent
from his duties hereunder for 60 consecutive business days during the
Term or for such longer period of time as is the eligibility period
for long term disability benefits under any long-term disability
policy maintained or arranged by the Corporation for Executives of the
Corporation the Corporation may terminate Executive's employment under
this Agreement by written notice. In such event, the Executive shall
be entitled only to compensation and expenses accrued and unpaid as at
the date of termination of the Executive's employment.
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c) The Corporation shall have the right to terminate the Executive's
employment under this Agreement for Cause. For purposes of the
Agreement, the Corporation shall have "Cause" to terminate the
Executive's employment if (i) the Executive assigns, pledges, or
otherwise disposes of his rights and obligations under this Agreement,
or attempts to do the same without the prior written consent of the
Corporation; or (ii) the Executive deliberately or intentionally fails
to fulfill his obligations under this Agreement or has materially
breached any of the terms or conditions hereof and, fails to cure such
failure or breach within thirty (30) days after receiving written
notice from the Corporation thereof; (iii) Executive has engaged in
willful misconduct or has acted in bad faith in the performance of his
duties under this Agreement that has had a materially adverse effect
on the Corporation or its financial performance; or (iv) the Executive
has breached Section 7 of this Agreement; or (v) the Executive has
committed or been convicted of a felony or has committed embezzlement
or a theft of funds or assets of the Corporation. If the Corporation
terminates this Agreement for Cause, the Corporation's obligations
hereunder shall cease, except for the Corporation's obligation to pay
the Executive the compensation and expenses accrued and unpaid as of
the date of termination in accordance with the provisions hereof.
Notwithstanding the foregoing, for a period of one year after a Change
of Control, as defined below, the term Cause shall solely mean an
event described in clauses (i), (ii), (iv) or (v) of the immediately
preceding sentence.
d) In the event that at any time Executive resigns for Good Reason or
is discharged other than for Cause as defined above or in the event
that at any time after a Change of Control (as defined below) but
prior to the end of one (1) year after such Change of Control, the
Executive is discharged for any reason other than for Cause (as
defined above) or resigns for any reason (other than due to
termination for Cause), the Executive, in addition to receiving any
compensation and expenses accrued and unpaid as at the date of
termination of the Executive's employment, shall begin to receive upon
discharge or resignation a severance payment equal to one (1) year's
salary at the same rate of pay in effect at the date of the Change of
Control to be paid in weekly installments for the one (1) year period
following such discharge or resignation. In addition, Executive shall
receive (i) benefits as if he continued to be employed for the period
of the severance payment and (ii) Executive's bonus for the period
covered by the severance payment calculated on a prorated basis as of
the date or discharge or resignation. In the event that any time after
a Change of Control (as defined below) but prior to the end of one (1)
year after such Change of Control, the Executive is discharged for any
reason other than for Cause (as defined above) or resigns for any
reason (other than due to termination for Cause), all Stock Options
and Incentive Compensation earned shall immediately accelerate and
become 100% vested. The Executive will have a period of three (3)
months from the date of termination to exercise such stock options.
Anything contained herein to the contrary notwithstanding, a "Change
of Control" shall be deemed to occur when a person, corporation,
partnership, association, entity or group (as defined for purposes of
the Securities Exchange Act of 1934, as amended) (x) directly or
indirectly acquires a majority of the outstanding voting securities of
ATC Healthcare Inc., a Delaware corporation, including as the result
of a merger or consolidation or other form of reorganization or
recapitalization, or (y) acquires securities bearing a majority of
voting power with respect to election of directors of ATC, including
as the result of a merger or consolidation or other form of
reorganization or recapitalization, or (z) acquires all or
substantially all of ATC's assets or the assets of its direct or
indirect subsidiaries if those assets are substantially all of the
assets of the business conducted by ATC and its subsidiaries taken as
a whole. "Good Reason" shall mean (i) any material reduction in
Executive's duties, titles or responsibilities, (ii) the required
relocation of Executive from the greater New York area, or (iii) any
breach of section 4 of this Agreement by the Corporation unless such
breach is cured within fifteen (15) days of written notice of the
breach by Executive.
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e) Notwithstanding anything to the contrary contained herein, all
payments owed to the Executive upon termination of this Agreement
shall be subject to offset by the Corporation for amounts owed to the
Corporation by the Executive hereunder or otherwise.
f) Notwithstanding anything to the contrary contained herein, there
shall be no requirement on the part of Executive to seek other
employment or otherwise mitigate damages in order to be entitled to
the full amount of any payments and benefits to which Executive is
entitled under this Agreement or as the result of any breach of this
Agreement. However, in the event Executive obtains other employment
during all or a portion of the period during which Executive is to
receive such payments and benefits, the amount of the payments and
benefits to which Executive is entitled under this Agreement during
the period of the other employment shall be reduced [but not to an
amount that is less than zero (0)] by the amount of the base salary
and equivalent benefits received by Executive from the other
employment during that period.
g) The obligations of the Corporation and the Executive pursuant to
this Section 5 shall survive the termination of this Agreement.
6. NOTICES. Any written notice permitted or required under this Agreement
shall be deemed sufficient when hand delivered or posted by certified or
registered mail, postage prepaid, and addressed to:
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If to Staff Builders:
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ATC Healthcare, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
or
If to the Executive:
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Xxxxx Xxxxxxx
00000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Either party may, in accordance with the provisions of this Section, give
written notice of a change of address, in which event all such notices and
requests shall thereafter be given as above provided at such changed address.
7. CONFIDENTIALITY OBLIGATIONS; NON-COMPETITION BY EXECUTIVE
a) The Executive acknowledges that in the course of performing his
duties hereunder, he will be made privy to confidential and
proprietary information. The Executive covenants and agrees that
during the term of this Agreement and at any time after the
termination of this Agreement, he will not directly or indirectly, for
his own account or as an employee, officer, director, partner, joint
venturer, shareholder, investor, or otherwise, disclose to others or
use for his own benefit or cause or induce others to do the same, any
proprietary or confidential information or trade secrets of ATC,
including but not limited to, any confidential information concerning
the business of ATC.
b) The Executive agrees that, during the term hereof and for one (1)
year following the termination hereof, he will not, within the United
States (i) compete, directly or indirectly, for his own account or as
an employee, officer, director, partner, joint venturer, shareholder,
investor, or otherwise, with the supplemental staffing and permanent
placement business conducted by ATC during the term of this Agreement;
or (ii) be employed by, work for, advise, consult with, serve or
assist in any way, directly or indirectly, any person or entity whose
business competes with the supplemental staffing or permanent
placement business conducted by ATC during the term of this Agreement,
or (iii) directly or indirectly solicit, recruit or hire any employee
of ATC to leave the employ of ATC; or (iv) solicit any client or
customer of ATC to terminate or modify its business relationship with
ATC Notwithstanding the foregoing, Executive's ownership of less than
five (5%) of the outstanding stock of any publicly-traded company
shall not be deemed to violate this subsection.
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c) The foregoing restrictions on the Executive set forth in this
Section 7 shall be operative for the benefit of ATC and of any
business owned or controlled by ATC during the term of this Agreement,
or any successor or assign of any of the foregoing.
d) Executive acknowledges that the restricted period of time and
geographical area specified in this Section 7 is reasonable, in view
of the nature of the business in which ATC is engaged and the
Executive's knowledge of ATCs' business. Notwithstanding anything
herein to the contrary, if the period of time or the geographical area
specified in this Section 7 should be determined to be unreasonable in
a judicial proceeding, then the period of time and territory of the
restriction shall be reduced so that this Agreement may be enforced in
such area and during such period of time as shall be determined to be
reasonable.
e) The parties acknowledge that any breach of this Section 7 will
cause ATC irreparable harm for which there is no adequate remedy at
law, and as a result of this, ATC shall be entitled to the issuance of
an injunction, restraining order or other equitable relief in favor of
ATC restraining Executive from committing or continuing any such
violation. Any right to obtain an injunction, restraining order or
other equitable relief hereunder shall not be deemed a waiver of any
right to assert any other remedy ATC may have at law or in equity.
f) For purposes of this Section 7, the term "ATC" shall refer to the
Corporation and all of its parents, subsidiaries and affiliated
corporations during the term of this Agreement.
8. ARBITRATION. Any controversy, dispute or claim arising out of or
relating to this Agreement, or the breach hereof, shall be resolved by
arbitration in accordance with the commercial arbitration rules of the American
Arbitration Association through its New York, New York office, and the hearing
of such dispute will be held in New York, New York. The decision of the
arbitrator(s) will be final and binding on all parties to the arbitration and
said decision may be filed as a final judgment in any court. The prevailing
party in any arbitration shall be entitled to recover its reasonable attorney'
fees and costs from the other party or parties. Notwithstanding the foregoing,
nothing contained in this Agreement shall limit a party's right to seek specific
performance of any term or provision of this Agreement to the extent permitted
by applicable law.
9. HANDBOOK Group Insurance Program Booklet. The Executive acknowledges
receipt of ATC Employee Handbook and Group Insurance Program Booklet (together,
"the Handbook"). The terms of the Handbook are incorporated herein by reference.
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10. STOCK OPTIONS. The Executive will be granted stock options to purchase
400,000 shares of AHN, which will be issued at the closing price of ATC's stock
on the effective day of this Agreement and vest over three (3) years in
accordance with the terms of an Option Agreement between the Executive and the
Corporation, a copy of which is attached. Vesting will occur as follows: 125,000
shares will vest one (1) year from the effective date; 125,000 shares will vest
two (2) years from the effective date; and 150,000 shares will vest three (3)
years from the effective date.
11. INDEMNIFICATION AND INSURANCE. In the event that during or after the
term of this Agreement, Executive is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative ("proceeding"), by reason of the fact
that he is or was an officer, employee or agent of the Corporation or acting in
such capacity, Executive shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by applicable law and the
Corporation's Bylaws, it being agreed that such indemnification, including the
obligation to advance expenses, shall be mandatory, subject to applicable law.
The Corporation agrees, that it will maintain Directors and Officers Insurance
during the term of this Agreement and for a period of three (3) years thereafter
covering Executive and the other officers and managers of the Corporation in an
amount that is generally in effect at other similar public companies.
12. BINDING EFFECT. This agreement shall bind and inure to the benefit of
ATC, its successors and assigns and shall inure to the benefit of, and be
binding upon, the Executive, his heirs, executors and legal representatives.
13. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall in no way affect the validity or enforceability of any
other provision, or any part thereof.
14. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations, and discussions, whether oral or written, of the parties.
16. MODIFICATION, TERMINATION OR WAIVER. This Agreement may only be amended
or modified by a written instrument executed by the parties hereto. The failure
of any party at any time to require performance of any provision of this
Agreement shall in no manner affect the right of such party at a later time to
enforce the same.
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IN WITNESS WHEREOF, ATC and the Executive have executed this Employment
Agreement as of the date first above written. ATC Healthcare, INC.
Date: _________________________ By:___________________________________
Xxxxx Xxxxxxxx, CEO
Date: _________________________ By:___________________________________
Xxxxx Xxxxxxx
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