EXHIBIT 10.1 - EXECUTIVE EMPLOYMENT AGREEMENT BETWEEN ALTERNATIVE RESOURCES
CORPORATION AND XXXXX XXXXX DATED JULY 1, 1999
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") made effective as of July 1, 1999
by and between Alternative Resources Corporation (the "Company") and Xxxxx Xxxxx
(the "Executive").
In consideration of the mutual covenants contained in this Agreement,
the parties hereby agree as follows:
SECTION I
EMPLOYMENT
The Company agrees to employ the Executive, and the Executive agrees to be
employed by the Company for the Period of Employment as provided in Section III
A. below upon the terms and conditions provided in the Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment, the Executive agrees to serve as
President, ARC Field Operations, and to be responsible for the typical
responsibilities expected of an officer holding such positions and such other
responsibilities consistent with such positions as may be assigned to the
Executive from time to time by the Chief Executive Officer of the Company.
SECTION III
TERMS AND DUTIES
A. PERIOD OF EMPLOYMENT
The term of Executive's employment under this Agreement will commence
as of July 1, 1999, and shall continue through December 31, 1999, subject to
extension or termination as provided in this Agreement (the "Period of
Employment"). The term shall be extended for an additional one year period as of
December 31, 1999 and as of each December 31 thereafter, unless either party
gives ninety (90) days prior notice of its intent not to extend.
B. DUTIES
During the Period of Employment, the Executive shall devote all of his
business time, attention and skill to the business and affairs of the Company
and its subsidiaries, except that Executive may (i) during July of 1999, perform
services for his prior employer as necessary to assist in an orderly transition
of his duties for such employer, so long as the Chief Executive Officer of the
Company does not determine that such activities unreasonably interfere with his
duties hereunder; (ii) participate in the affairs of any governmental,
educational or other charitable institution, or engage in professional speaking
and writing activities, so long as the Board of Directors of the Company, does
not determine, in good faith, that such activities unreasonably interfere with
the business of the Company or diminish the Executive's obligations under the
Agreement; or (iii) serve as a member of the board of directors of other
corporations, so long as the Board of Directors of the Company, in its
discretion, specifically approves such service, and in any such case, the
Executive shall be entitled to retain all fees, royalties and other compensation
derived from such activities in addition to the compensation and other benefits
payable to him under the Agreement; and provided further, that the Executive may
invest his personal or family funds in any form or manner he may choose that
will not require any services on his part in the operation of or the affairs of
the companies in which such investments are made. The Executive will perform
faithfully the duties consistent with his position as President, ARC Field
Operations that may be assigned from him from time to time by the Chief
Executive Officer.
SECTION IV
COMPENSATION AND BENEFITS
BASE SALARY
During the Period of Employment, the Company agrees to pay the
Executive a base salary ("Base Salary") of Two Hundred and Fifty Thousand
Dollars ($250,000). Such Base Salary shall be payable according to the customary
payroll practices of the Company but in no event less frequently than bi-weekly
installments.
ANNUAL INCENTIVE AWARDS
The Executive will not be eligible for an annual incentive compensation
award for the period of July 1, 1999 to December 31, 1999. The Executive shall
be eligible for an incentive compensation award for calendar year 2000 of up to
One Hundred and Fifty Thousand Dollars ($150,000). The incentive compensation is
awarded based upon ARC's corporate performance as well as individual goals
jointly established with the Chief Executive Officer.
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OPTIONS
The Company will take all actions necessary to grant to Executive, as
of July 1, 1999, a non-qualified stock option to purchase 200,000 shares of the
Company's common stock at an exercise price equal to the closing price of the
common stock as reported in the WALL STREET JOURNAL for trading on the date the
grant is approved by the Board of Directors and with a term of ten years. The
option will not be exercisable until January 31, 2000 and shall become
exercisable with respect to 4,762 shares on January 31, 2000 and with respect to
an additional 4,762 shares on the last day of each succeeding month, with the
option becoming exercisable with respect to the final 4,758 shares on June 30,
2003. The option shall be in the form approved by the Board of Directors of the
Company and, except as otherwise provided herein, shall be governed by terms and
provisions comparable to those applicable to options granted under the Company's
Stock Option Plan.
Notwithstanding the foregoing, if (i) the Period of Employment ends
because the Company ends the automatic extension thereof under Section III A. of
this Agreement; (ii) the Company terminates the employment of the Executive
Without Cause as defined in Section VIII; (iii) the Executive's employment
hereunder terminates because of his death or disability (as defined in Section
VI); or (iv) there is a change in control of the Company, such option shall
become fully exercisable and shall remain exercisable for the remainder of their
term.
For purposes of the Agreement, a "change in control" of the Company
shall be deemed to occur in connection with any of the following events with
respect to the Company:
(i) The acquisition by an entity, person or group (including
all affiliates of such entity, person or group) of beneficial
ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934 (which definition shall apply
even if the Company is not then subject to such Act), of
capital stock of the Company entitled to exercise more that
30% of the outstanding voting power of all capital stock of
the Company ("Voting Stock");
(ii) The effective time of (i) a merger or consolidation of
the Company with one or more other corporations as a result of
which the holders of the outstanding Voting Stock immediately
prior to such merger or consolidation (other than the
surviving or resulting corporation or any affiliate thereof)
hold less than 50% of the Voting Stock of the surviving or
resulting corporation, or (ii) a transfer of more than 50% (in
value) of the assets of the Company other than to a transferee
in which the Company owns at least 50% of the Voting Stock; or
(iii) The election to the Board of Directors of the Company of
the lesser of (i) three directors or (ii) directors
constituting a majority of the number of directors of the
Company then in office, without the recommendation of the
existing Board of Directors.
ADDITIONAL BENEFITS
The Executive will be entitled to participate in all compensation or
employee benefit plans or programs and receive all benefits and perquisites for
which any salaried executive employees are eligible under any existing or future
plan or program established by the Company for salaried executive employees. The
Executive will participate to the extent permissible under the terms and
provisions of such plans or programs in accordance with plan or program
provisions. These may include group hospitalization, health, dental care, life
or other insurance, tax qualified pension, savings, thrift and profit sharing
plans, termination pay programs, sick leave plans, travel or accident insurance,
short and long term disability insurance, and contingent compensation plans
including capital accumulation programs, restricted stock programs, stock
purchase programs and stock option plans. Nothing in this Agreement will
preclude the Company from amending or terminating any of the plans or programs
applicable to salaried executive employees of the Company. Notwithstanding the
foregoing sentence, no such amendment or termination shall reduce or otherwise
adversely affect Executive's rights under Section IV C. of this Agreement. In
addition to the foregoing benefits, Executive shall be entitled to receive the
following:
(i) term life insurance of not less than $250,000; and
(ii) a paid vacation of four (4) weeks during each twelve (12) month
period during the Period of Employment.
ADJUSTMENTS
Notwithstanding any provision here and to the contrary, the Company and
the Executive agree that the Board of Directors of the Company shall reevaluate
the incentive compensation set forth in Section IV B. as part of the approval of
the 1999 Operating Plan for the Company. To the extent deemed necessary by the
board of Directors to align such targets with such Operating Plan, such targets
hereunder shall be adjusted.
SECTION V
BUSINESS EXPENSES
The Company will reimburse the Executive for all reasonable travel and
other expenses incurred by the Executive in connection with the performance of
his duties and responsibilities under this Agreement. Executive must support all
expenditures with customary receipts and expense reports subject to review by
the Company.
SECTION VI
DISABILITY
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A. PAYMENTS
Executive's employment hereunder may be terminated by the Company if
(i) Executive becomes physically or mentally incapacitated, (ii) is unable for a
period of one hundred eighty (180) consecutive days to perform his material
duties and responsibilities and (iii) a determination is made regarding
Executive's continued incapacity by a physician appointed by the Company (such
continued incapacity is hereinafter referred to as "disability"). Upon any such
termination for disability, Executive shall be entitled to receive (i) his Base
Salary, as well as the annual incentive award, prorated in each case through the
date on which the Executive is first eligible to receive payment of long term
disability benefits in lieu of Base Salary under the Company's long term
disability benefit plan as then in effect covering the Executive, and (ii) his
accrued benefits under the terms of the plans, policies and procedures of the
Company.
B. ASSISTANCE TO THE COMPANY
During the period the Executive is receiving payments of either regular
compensation or disability insurance benefits described in this Agreement and as
long as he is physically and mentally able to do so, the Executive will furnish
information and assistance to the Company and from time to time will make
himself available to the Company with respect to areas and matters in which he
was involved during his employment with the Company.
SECTION VII
DEATH
In the event of the death of the Executive during the Period of
Employment, (i) Executive's estate shall be entitled to receive his Base Salary,
as well as the annual incentive award, prorated in each case through the date of
the Executive's death, and (ii) Executive's designated beneficiary or estate, as
the case may be, shall be entitled to his accrued benefits, including, but not
limited to, life insurance proceeds, under the terms of the plans, policies and
procedures of the Company.
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A. TERMINATION WITHOUT CAUSE
If the Company terminates Executive's employment Without Cause during
the Term of Employment, as defined in this Agreement, or the Term of Employment
ends because the Company ends the automatic extension thereof under Section III
A. of this Agreement, the Company will pay to the Executive in a lump sum, his
Base Salary for a period of twenty four (24) months. Earned but unpaid Base
Salary will be paid in a lump sum at the time of such termination. The Company
also will pay the Executive in a lump sum upon such termination an amount equal
to a prorated portion of the annual incentive award for the year in which the
termination occurred. The benefits and perquisites described in this Agreement
as in effect at the date of termination of employment will be continued for the
then remaining Period of Employment.
B. TERMINATION WITH CAUSE
If the Company terminates Executive With Cause, (i) Executive shall be
entitled to receive his Base Salary prorated through the date of Executive's
termination, and (ii) Executive shall be entitled to his accrued benefits under
the terms of the plans, policies and procedures of the Company.
C. EFFECT OF CERTAIN TERMINATIONS
Upon termination of the Executive's employment for reasons other than
due to death, disability, or pursuant to Paragraph A of this Section, or upon
Executive's resignation, the Period of Employment and the Company's obligation
to make payments under this Agreement will cease as of the date of termination
except as expressly defined in this Agreement. Executive shall have the right to
voluntarily terminate this Agreement, other than for Good Reason or in
conjunction with a Change in Control, upon two weeks prior notice to the
Company. If the Executive voluntarily terminates his employment with the
Company, (i) Executive shall be entitled to receive his Base Salary prorated
through the date of Executive's voluntary termination, and (ii) Executive shall
be entitled to his accrued benefits under the terms of the plans, policies and
procedures of the Company.
D. DEFINITIONS
For this Agreement, the following terms have the following meanings:
(1) Termination "With Cause" means termination of the
Executive's employment by the Company's Board of Directors acting in
good faith by written notice by the Company to the Executive specifying
the event relied upon for such termination, due to the Executive's
serious, willful misconduct with respect to his duties under this
Agreement, including, but not limited to, conviction for a felony or
perpetration of a common law fraud, which has resulted or is likely to
result in material economic damage to the Company.
(2) Termination "Without Cause" means termination by the
Company of the Executive's employment other than due to death,
disability, or termination With Cause.
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SECTION IX
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE PERIOD OF EMPLOYMENT
A. COOPERATION DURING AND AFTER EMPLOYMENT
The Executive will, with reasonable notice during or after the Period
of Employment, furnish information as may be in his possession and cooperate
with the Company as may reasonably be requested in connection with any claims or
legal actions in which the Company is or may become a party.
B. CONFIDENTIAL INFORMATION
The Executive recognizes and acknowledges that all information
pertaining to the affairs, business, clients, customers or other relationships
of the Company, as hereinafter defined, is confidential and is a unique and
valuable asset of the Company. Access to and knowledge of this information are
essential to the performance of the Executive's duties under this Agreement. The
Executive will not during the Period of Employment or after, except to the
extent reasonably necessary in performance of the duties under this Agreement,
give to any person, firm, association, corporation or governmental agency any
information concerning the affairs, business, clients, customers or other
relationships of the Company, except as required by law. The Executive will not
make use of this type of information for his own purposes or for the benefit of
any person or organization other than the Company. The Executive will also use
his best efforts to prevent the disclosure of this information by others. All
records, memoranda, etc., relating to the business of the Company, whether made
by the Executive or otherwise coming into his possession, are confidential and
will remain the property of the Company.
C. CERTAIN RESTRICTED ACTIVITIES
During the Period of Employment and for a one (1) year period
thereafter, the Executive will not use his status with the Company to obtain
goods or services from another organization other than in the ordinary course of
business. During the Period of Employment and for a one (1) year period
following termination of the Period of Employment: the Executive will not make
any statements or perform any acts intended to advance the interest of any
existing or prospective competitors of the Company in any way that will injure
the interest of the Company; the Executive, without prior express written
approval by the Board of Directors of the Company, will not directly or
indirectly own or hold any proprietary interesting or be employed by or receive
compensation from any party engaged in the same or any similar business in the
same geographic areas the Company does business; and the Executive, without
express prior written approval from the Board of Directors, will not solicit any
members of the then current customers, clients or suppliers of the Company or
discuss with any employee of the Company information or operation of any
business intended to compete with the Company. For purposes of the Agreement,
proprietary interest means legal or equitable ownership, whether through stock
holdings or otherwise, of a debt or equity interest (including options,
warrants, rights and convertible interest) in a business firm or entity, or
ownership of more than 2% of any class of equity interest in a publicly held
company. The Executive acknowledges that the covenants contained herein are
reasonable as to geographic and temporal scope. For a twelve (12) month period
after termination of the Period of Employment for any reason, the Executive will
not hire any employee of the Company or solicit, other than by means of a
general solicitation to the public such as a newspaper advertisement, or
encourage any such employee to leave the employ of the Company.
D. REMEDIES
The Executive acknowledges that his breach or threatened or attempted
breach of any provision of Section IX would cause irreparable harm to the
Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section IX without being required to prove damages or furnish any bond or other
security. The Executive hereby acknowledge the necessity of protection against
the competition of, and certain other possible adverse actions by, the Executive
and that the nature and scope of such protection has been carefully considered
by the parties. The period provided and the area covered are expressly
represented and agreed to be fair, reasonable and necessary. If, however, any
court or arbitrator determines that the restrictions described herein are not
reasonable, the court or arbitration panel may modify, rewrite or interpret such
restrictions to include as much of their nature and scope as will render them
enforceable.
SECTION X
INDEMNIFICATION, LITIGATION
The Company will indemnify the Executive to the fullest extent permitted
by the laws of the state of incorporation in effect at that time, or certificate
of incorporation and by-laws of the Company whichever affords the greater
protection to the Executive. The Company will use its best efforts to obtain and
maintain customary directors and officers liability insurance, covering
Executive. The foregoing indemnification shall continue to apply following
termination of the Period of Employment for actions or omissions during the
Period of Employment.
SECTION XI
WITHOLDING TAXES
The Company may directly or indirectly withhold from any payments under
this Agreement all federal, state, city or other taxes that shall be required
pursuant to any law or governmental regulation.
SECTION XII
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EFFECT OF PRIOR AGREEMENTS
This Agreement contains the entire understanding between the Company and
the Executive with respect to the subject matter and supersedes any prior
employment, severance, or other similar agreements between the Company, its
predecessors and its affiliates, and the Executive.
SECTION XIII
MODIFICATON
Subject to Section IV E., this Agreement may not be modified or amended
except in writing signed by the parties. No term or condition of this Agreement
will be deemed to have been waived, except in writing by the party charged with
waiver. A waiver shall operate only s to the specific term or condition waived
and will not constitute a waiver for the future or act on anything other than
that which is specifically waived.
SECTION XIV
GOVERNING LAW; ARBITRATION
This Agreement and its validity, interpretation, performance and
enforcement shall be governed by the laws of the State of Illinois, without
giving effect to the choice of law provisions thereof.
Any dispute among the parties hereto shall be settled by arbitration in
accordance with the then applicable rules of the American Arbitration
Association and judgement upon the award rendered my be entered in any court
having jurisdiction thereof.
SECTION XV
NOTICES
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first-class postage prepaid by registered mail, return receipt requested,
or when delivered if by hand, overnight delivery services or confirmed facsimile
transmission, to the following:
(a) If to the Company, at:
ALTERNATIVE RESOURCES CORPORATION
000 Xxx-Xxxxx Xxxxxxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Chairperson, Governance Committee of Board
of Directors
or at such other address as my have been furnished to the Executive by the
Company in writing, or
(b) If to the Executive, at:
Xxxxx Xxxxx
00000 Xxxx Xxxxxxxx Xxx Xxxx
Xxxxxxxxxx, XX 00000
or at such other address as may have been furnished to the Company by the
Executive in writing.
SECTION XVI
BINDING AGREEMENT
This Agreement shall be binding on the parties' successors, heirs and
assigns.
SECTION XVII
MISCELLANEOUS
A. MULTIPLE COUNTERPARTS
This Agreement may be executed simultaneously in multiple counterparts
each of the same force and effect.
B. SEVERABILITY
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If any phrase, clause or provision of this Agreement is declared
invalid or unenforceable by an arbitrator or xxxx of competent jurisdiction,
such phrase, clause or provision shall be deemed severed from this Agreement,
but will not affect any other provisions of this Agreement, which shall
otherwise remain in full force and effect. In addition, there will be
automatically substituted herein for such severed phrase, clause or provision a
phrase, clause or provision as similar as possible which is valid and
enforceable.
C. HEADINGS
The headings and subheadings of this Agreement are inserted for
convenience of reference only and are not to be considered in construction of
the provisions hereof.
D. CONSTRUCTION
The Company and the Executive acknowledge that this Agreement was the
result of arm's length negotiations between sophisticated parties each
represented by legal counsel. Each and every provision of the Agreement shall be
construed as though both parties participated equally in the drafting of same,
and any rule of construction that a document shall be construed against the
drafting party shall not be applicable to this Agreement.
E. SURVIVORSHIP
The provisions of Sections IV-XVII shall survive the termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY
ALTERNATIVE RESOURCES CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-----------------------
Xxxxxxx X. Xxxx, Chairman of the Board
President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxx Xxxxx
-----------------------------------------
Xxxxx Xxxxx
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