Exhibit 10.2
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EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), is made and entered into
as of the Effective Date (as hereinafter defined), by and between Xxxxx
Consulting, Inc. and/or its successors ("Company"), a Delaware corporation, and
Xxxxxxx X. Xxxxxxxx, a resident of Illinois (the "Employee").
W I T N E S S E T H:
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WHEREAS, Xxxxx, Inc. ("CI") and its affiliates (including the Company)
(collectively "CI Affiliates" and individually "CI Affiliate") are engaged in
business in the State of Illinois and throughout the United States; and
WHEREAS, the Company desires to employ the Employee in the capacity of
Corporate Controller and Chief Accounting and Financial Officer of the Company
and CI, upon the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to enter into this Agreement with
respect to his employment and services upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, the Company hereby employs the Employee and the
Employee hereby accepts such employment upon the terms and conditions
hereinafter set forth:
1. Term of Employment. The term of employment under this Agreement
shall commence on June 1, 2004 (the "Effective Date") and shall extend through
May 31, 2005 subject to Section 8 of this Agreement. Absent notice of
termination (described below), commencing on June 1, 2005 and continuing on each
subsequent June 1, the term of the Employee's employment shall automatically be
extended for an additional 12 months. To cause the Employee's employment to
terminate at the end of the original or an extended term, either party, at least
60 days prior to such date, shall give written notice to the other party that
the Agreement will terminate.
2. Duties of the Employee. The Employee agrees that during the term of
this Agreement, he will devote substantially all his full professional and
business-related time, skills and best efforts to the businesses of the Company.
The Employee shall report to the Chief Operating Officer of the Company. The
Employee may engage in personal investment activities provided such activities
do not interfere with the performance of his duties hereunder or violate the
noncompetition and confidential information provisions set forth herein. Nothing
herein, however, will prevent the Employee, (a) upon approval of Chief Executive
Officer and Chief Operating Officer of CI, from service as a director or trustee
of other corporations or businesses which are not directly or indirectly in
competition with the business of the Company or in competition with any present
or future CI Affiliate, (b) from service on civic or charitable boards or
committees, or (c) from engaging in personal, passive, investment activities;
provided such activities do not interfere with the performance of his duties
hereunder or violate the noncompetition and confidential information provisions
set forth herein. Employee shall be indemnified for actions performed in the
course of his employment to the same extent as other similarly situated
employees of the CI Affiliates.
3. Compensation.
(a) Base Salary. The Company shall pay the Employee an annual base
salary of One Hundred and Seventy-Five Thousand Dollars ($175,000.00), for each
year of this Agreement (or fraction for portions of a year) ("Base Salary"). The
Employee's Base Salary shall be subject to all appropriate federal and state
withholding taxes and shall be payable in accordance with the normal payroll
procedures of the Company. The Employee's Base Salary may be adjusted
periodically upwards in accordance with the Company's salary adjustment
guidelines.
(b) Annual Bonus. In addition to the Base Salary set forth in Section
3(a) hereof, the Employee shall receive an annual bonus opportunity (the "Annual
Bonus") each year during his employment equal to 75% of his Base Salary. The
Annual Bonus shall be based on the financial performance of the Company and is
not guaranteed. The target levels for the Annual Bonus will be communicated to
the Employee annually no later than April 30th of the fiscal year for which the
Annual Bonus applies. The Annual Bonus will be payable if the target levels are
met and the employee continues employment through December 31st of the year the
Annual Bonus is determined. The Annual Bonus amount will be communicated and
paid to the Employee no later than the March 15th of the year following the
fiscal year to which the Annual Bonus applies. The Annual Bonus will be subject
to all appropriate federal and state withholding taxes and shall be paid in
accordance with the normal payroll procedures of the Company.
4. Employee Benefits. The Employee and his eligible dependents shall be
eligible to participate in the qualified employee benefit programs made
available generally to other employees of the CI Affiliates as well as any other
programs made available generally to other Employees of the Company; provided,
however, that the Employee and his eligible dependents must meet any and all
eligibility provisions required under such qualified employee benefit programs.
The Employee will be also eligible for participation in the Xxxxx Consulting,
Inc. Execu-flex Benefit Plan, which will provide the Employee with a $15,000
contribution each plan year for so long as this Plan is offered to other
employees and for as long as this Agreement remains in effect.
5. Paid Time Off. The Employee shall be entitled to twenty-two (22)
days paid time off (PTO) during each calendar year or such higher amount if the
Company's PTO plan provides for a greater number of days based upon the
Employee's length of service. The Employee may carry over up to twenty-seven
(27) days of PTO to the next succeeding calendar year or such higher amount
allowed for under the Company's PTO Plan based on the Employee's length of
service.
6. Reimbursement of Expenses. The Company recognizes that the Employee
will incur legitimate business expenses in the course of rendering services to
the Company hereunder. Accordingly, the Company shall reimburse the Employee,
upon presentation of receipts or other adequate documentation, for all necessary
and reasonable business expenses incurred by the Employee in the course of
rendering services to the Company under this Agreement consistent with the
Company's Travel Policy then in effect. This includes reimbursements for the
usage of a cellular phone while this Agreement remains in effect. Credits to the
Airline Frequent Flyer accounts of the Employee as a result of business travel
shall belong to the Employee.
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7. Working Facilities. The Employee shall be furnished an office,
administrative assistance and such other facilities and services suitable to his
position and adequate for the performance of his duties ("Working Facilities"),
which shall be consistent with the reasonable policies of the Company.
8. Termination. The employment relationship between the Employee and
the Company created hereunder shall terminate before the expiration of the then
current term upon the occurrence of any one of the following events:
(a) Death or Permanent Disability. The death or permanent disability of
the Employee. For the purpose of this Agreement, "permanent disability" of the
Employee shall mean "disability" as defined under Xxxxx Consulting, Inc.'s
long-term disability plan.
(b) Termination for Cause. The following events, actions or inactions
by the Employee shall constitute "Cause" for termination of this Agreement:
(i) Substantial refusal or failure to perform duties or any
reasonable obligation or substantial poor performance by the Employee
that is repeated or continued following thirty (30) days written notice
to the Employee of such refusal or failure to perform or of substantial
poor performance given by the Chief Operating Officer of the Company to
the Employee;
(ii) Employee's failure to rectify any material breach of
contract under this Agreement within 30 days after written notice of
such breach is given by the Chief Operating Officer of the Company to
the Employee;
(iii) any gross misconduct or gross negligence in the
performance of his duties that materially and adversely affects the
Company;
(iv) a material breach of the Intellectual Property and
Confidentiality Agreement with the Company;
(v) the intentional diversion of a material financial
opportunity away from the CI Affiliates;
(vi) the commission of an act of dishonesty or fraud that is
of a material nature and involves a material breach of trust with
respect to the interests of the Company; and
(vii) the conviction of Employee for any felony or of a crime
involving moral turpitude.
Any notice of discharge shall describe with reasonable specificity the cause or
causes for the termination of the Employee's employment, as well as the
effective date of the termination (which effective date may be the date of such
notice). If the Company terminates the Employee's employment for any of the
reasons set forth above, the Company shall have no further obligations hereunder
from and after the effective date of termination (other than as set
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forth below) and shall have all other rights and remedies available under this
Agreement or any other agreement and at law or in equity.
(c) Constructive Termination. In the event of a failure to pay or
provide Employee's earned Base Salary, earned Annual Bonus, benefits, and paid
time off other than as permitted by this Agreement, the Employee shall have the
right to terminate his employment and such termination shall be treated in all
respects as if it had been a termination of employment by the Company without
Cause.
(d) Termination by the Employee with Notice. The Employee may terminate
this Agreement at any time without liability to the Company arising from the
resignation of the Employee upon sixty (60) days prior written notice to the
Company. The Company retains the right after proper notice of the Employee's
voluntary termination to require the Employee to cease his employment
immediately; provided, however, in such event, the Company shall remain
obligated to pay the Employee his salary during the sixty (60) day notice
period. During such sixty (60) day notice period, the Employee shall provide
such consulting services to the Company as the Company may reasonably request
and shall assist the Company in training his successor and generally preparing
for an orderly transition.
(e) Termination by the Company with Notice. After June 1, 2005, or
prior to such anniversary in connection with a general restructuring of the
Company as a whole, the Company may terminate this Agreement at any time without
liability other than as set forth in Section 9(d) upon sixty (60) days prior
written notice to the Employee. A general restructuring of the Company is
defined as a voluntary dissolution, bankruptcy, liquidation or any other type of
insolvency reorganization. The Company retains the right after proper notice has
been given to the Employee to require the Employee to cease his employment
immediately; provided, however, in such event, the Company shall remain
obligated to pay the Employee his salary during the sixty (60) day notice
period. During such sixty (60) day notice period, the Employee shall provide
such services to the Company as the Company may reasonably request and shall
assist the Company in training his successor and generally preparing for an
orderly transition.
(f) Termination due to Change in Control. For purposes of this
Agreement, a "Change in Control" shall be deemed to have occurred if:
(i) other than Xxxxx, Inc. or an existing subsidiary of Xxxxx,
Inc., the Company becomes a subsidiary of another corporation or entity
or is merged or consolidated into another corporation or entity or
substantially all of the assets of the Company are sold to another
corporation or entity; or
(ii) any person, corporation, partnership or other entity,
either alone or in conjunction with its "affiliates," as that term is
defined in Rule 405 of the General Rules and Regulations under the
Securities Act of 1933, as amended, or other group of persons,
corporation, partnerships or other entities who are not "affiliates"
but who are acting in concert, other than X.X. Xxxxxxx or his family
members or any person, organization or entity that is controlled by
X.X. Xxxxxxx or his family members, becomes the owner of record or
beneficially of securities of the Company that represent thirty-three
and one-third percent
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(33 1/3%) or more of the combined voting power of the Company's then
outstanding securities entitled to elect Board of Directors of the
Company; or
(iii) the Board of Directors of the Company or a committee
thereof makes a determination in its reasonable judgment that a "Change
of Control" of the Company has taken place.
If after a Change in Control, the Employee's employment is terminated by the
Company or its successors for any reason other than Cause, as defined in Section
8(b), the Employee will be entitled to the Compensation as specified in Section
9(f) of this Agreement.
9. Compensation Upon Termination.
(a) Accrued Obligations. Upon termination of the Employee's employment
under this Agreement for any reason the Employee shall be entitled to:
(i) any accrued, but unpaid, paid time off using the Base
Salary as of the date of termination;
(ii) any authorized but unreimbursed business expenses; and
(iii) any benefits to which the Employee is entitled under the
employee benefit programs maintained by the CI Affiliates in which the
Company participates.
The sum of the amounts described in clauses (i) through (iii) will be
hereinafter referred to as the "Accrued Obligations." The Accrued Obligations
shall be paid in a lump sum within thirty (30) days of the date of termination;
provided that the benefits under clause (iii) will be paid or provided in
accordance with the terms of the applicable employee benefit programs.
(b) Compensation for termination due to Death or Permanent Disability.
Upon termination of the Employee's employment under this Agreement due to Death,
the Employee's estate shall receive the Accrued Obligations as of the date of
termination. Upon termination of the Employee's employment under this Agreement
due to Permanent Disability, the Employee shall receive the Accrued Obligations
as of the date of termination.
(c) Compensation for termination for Cause. Upon termination of the
Employee's employment under this Agreement for Cause, the Employee shall be
entitled to the Accrued Obligations as of the date of termination.
(d) Compensation for termination due to Constructive Termination or
termination by the Company with Notice. Upon termination of the Employee's
employment under this Agreement as a result of Constructive Termination as
defined in Section 8(c) or Termination by the Company with Notice as defined in
Section 8(e), either during a contract year or at the end of a contract year,
the Employee shall receive the Accrued Obligations as of the date of termination
and the Base Salary in effect as of the date of termination for a period of
Twenty-six (26) weeks.
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(e) Compensation for termination by the Employee with Notice. Upon
termination of the Employee's employment under this Agreement due to the
Employee's resignation with notice, either during a contract year or at the end
of a contract year, the Employee shall be entitled to the Accrued Obligations as
of the date of termination.
(f) Compensation for termination following a Change of Control. Upon
termination by the Company or its successors of the Employee's employment
following a Change in Control as defined in Section 8(f) of this Agreement, the
Employee shall receive the Accrued Obligations as of the date of termination and
the Base Salary in effect as of the date of termination for a period of
Fifty-two (52) weeks.
(g) Withholding; Offset. Amounts payable under this Section 9 shall be
paid consistent with the normal payroll practices of this company and subject to
all appropriate federal and state withholding taxes, and shall be offset by any
amounts due the Company under this Agreement.
10. Noncompetition; Nonsolicitation.
The Employee acknowledges that he occupies a position of special trust
and confidence with respect to the Company, and that the position imposes the
obligation to act in a stewardship capacity with respect to the preservation and
development of the Company and its resources for the benefit of future, as well
as present, shareholders, officers, directors and employees. The Employee
acknowledges that as a result of the special position he occupies with the
Company, he will have access to Confidential Information (as that term is
defined in that certain Intellectual Property and Confidentiality Agreement
executed by Employee on the date hereof), and to trade secrets of the Company.
In consideration for the compensation he will receive as an employee of the
Company and in recognition of his special relationship with the Company, and to
protect the Company's legitimate business interests, including but not limited
to its Confidential Information, trade secrets and the goodwill of the Company's
business, the Employee agrees to the terms hereof:
(a) The Employee shall not, for a period of twelve (12) months
following his termination of employment with the Company and all CI Affiliates,
for any reason, for himself or as agent, partner or employee of any person,
corporation or firm, directly or indirectly, engage in services of the type
provided by the Company for:
(i) any Client (as defined below) of the Company or a CI
Affiliate for whom the Employee performed services during the
twenty-four (24) months prior to termination, or for whom the Employee
supervised the performance of services,
(ii) any prospective Client of the Company or a CI Affiliate
to whom the Employee submitted, or assisted in the submission of, a
proposal, during the twenty-four (24) month period preceding his
termination, and about whom the Employee learned Confidential
Information.
"Client" as used in this Section 10 shall mean any person or entity for whom the
Company or a CI Affiliate performed services or provided products within the
twenty-four (24) months
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immediately preceding the termination of the Employee's employment with the
Company and all CI Affiliates.
(b) The Employee shall not, at any time during which he is an employee
of the Company or another CI Affiliate and for twelve (12) months after his
termination with the Company and all CI Affiliates, for any reason, whether for
his own account or for the account of any person other than a CI Affiliate,
directly or indirectly, endeavor to solicit away from the Company or a CI
Affiliate, or facilitate the solicitation away from the Company or a CI
Affiliate of, any Client of the Company or a CI Affiliate or induce same to
limit, alter or reduce its relationship with the Company.
(c) The Employee shall not, at any time during which he is an employee
of the Company or another CI Affiliate and for twelve (12) months after his
termination for any reason from the Company and all CI Affiliates, whether for
his own account or for the account of any person other than a CI Affiliate,
directly or indirectly, induce away from the Company or a CI Affiliate, or
facilitate the inducement away from the Company or a CI Affiliate of, any
personnel of the Company or a CI Affiliate or interfere with the faithful
discharge by such personnel of their contractual and fiduciary obligations to
serve the Company's or a CI Affiliate's interests and those of its Clients of
undivided loyalty.
11. Confidential Information. Employee shall abide by the terms of the
Company's standard Intellectual Property and Confidentiality Agreement, which is
attached hereto as Exhibit A.
12. Property of the Company. The Employee acknowledges that from time
to time in the course of providing services pursuant to this Agreement he shall
create or have the opportunity to inspect and use certain property, both
tangible and intangible, of the Company and the Employee hereby agrees that such
property shall remain the exclusive property of the Company, and the Employee
shall have no right or proprietary interest in such property, whether tangible
or intangible, including, without limitation, the Employee's customer and
supplier lists, contract forms, books of account, computer programs and similar
property.
13. Equitable Relief. The Employee acknowledges that the services to be
rendered by him are of a special, unique and intellectual character, which gives
them a peculiar value, and the loss of which cannot reasonably or adequately be
compensated in damages in an action at law, and that a breach by him of any of
the provisions contained in this Agreement will cause the Company irreparable
injury and damage. The Employee further acknowledges that he possesses unique
skills, knowledge and ability and that competition by him in violation of this
Agreement or any other breach of the provisions of this Agreement would be
extremely detrimental to the Company. By reason thereof, the Employee agrees
that the Company shall be entitled, in addition to any other remedies it may
have under this Agreement or otherwise, to injunctive and other equitable relief
to prevent or curtail any breach of this Agreement by him.
14. Assignment. The Company may assign its rights under this Agreement
to any successor in interest, whether by merger, consolidation, sale of assets
or otherwise. This Agreement is personal to the Employee and may not be assigned
in any way by the Employee without the prior written consent of the Company.
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15. Severability and Reformation. The parties hereto intend all
provisions of this Agreement to be enforced to the fullest extent permitted by
law. If, however, any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future law, such provision shall be
fully severable, and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof, and the
remaining provisions shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance. Further, if any provision is held to be overbroad, a court may modify
that provision to the extent necessary to make the provision enforceable
according to applicable law and enforce the provision as modified.
16. Integrated Agreement. This Agreement constitutes the entire
Agreement between the parties hereto with regard to the subject matter hereof,
and there are no agreements, understandings, specific restrictions, warranties
or representations relating to said subject matter between the parties other
than those set forth herein, specifically referenced herein or otherwise herein
provided for.
17. Notices. All notices and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by certified mail (return receipt
requested) or sent by overnight delivery service, cable, telegram, facsimile
transmission or telex to the parties at the following addresses or at such other
addresses as shall be specified by the parties by like notice:
If to the Company:
Xxxxx Consulting, Inc.
000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxx
Chief Operating Officer
With a copy in the event of notice to the Company or CI to:
Vedder, Price, Xxxxxxx and Kammholz, P.C.
000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Lane X. Xxxxx, Esq.
If to Employee:
Xx. Xxxxxxx X.Xxxxxxxx
0 X. Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Notice so given shall, in the case of notice so given by mail, be
deemed to be given and received on the fourth calendar day after posting, in the
case of notice so given by overnight delivery service, on the date of actual
delivery and, in the case of notice so given by cable,
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telegram, facsimile transmission, telex or personal delivery, on the date of
actual transmission or, as the case may be, personal delivery.
18. Further Actions. Whether or not specifically required under the
terms of this Agreement, each party hereto shall execute and deliver such
documents and take such further actions as shall be necessary in order for such
party to perform all of his or its obligations specified herein or reasonably
implied from the terms hereof.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
ILLINOIS.
20. Application of Terms. Whenever used herein the terms Xxxxx, Inc.,
Xxxxx Consulting, Inc., (or any abbreviations thereof) shall include all
affiliates and successors thereof.
21. Counterparts. This Agreement may be executed in counterparts, each
of which will take effect as an original and all of which shall evidence one and
the same Agreement.
22. Arbitration. Without limiting the right of the Company or the
Employee to seek equitable relief to prevent irreparable injury, any dispute
arising out of or relating to this Agreement or the breach, termination or
validity thereof, which has not been resolved by agreement within 60 days after
written notice thereof by the affected Party shall be settled by arbitration in
accordance with the then current Center for Public Resources Rules for
Non-Administered Arbitration of Business Disputes, by a sole arbitrator. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. ss.
1-16, and judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction thereof. The place of arbitration shall be
Chicago, Illinois. The arbitrator is not empowered to award damages in excess of
compensatory damages and each Party hereby irrevocably waives any right to
recover such damages with respect to any dispute resolved by arbitration.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
XXXXX CONSULTING, INC.
By:/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Chief Operating Officer
Dated: July 16, 2004
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EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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