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EMPLOYMENT AGREEMENT Exhibit 10.03
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective November __, 1997, by and between CSR, INC., a Delaware corporation
(hereinafter referred to as "the Company") and XXXXXX X. XXXXXX (hereinafter
referred to as "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company, upon the terms hereinafter set forth;
and
WHEREAS, in the course of building the business of the Company and its
affiliates, including CSR, and in his capacity as an officer thereof, Employee
will gain knowledge of the business, affairs, customers and methods of the
Company and its affiliates, will have access to lists of the Company's and its
affiliates' customers and their needs, and will become personally known to and
acquainted with the Company's and its affiliates' customers thereby
establishing a personal relationship with such customers for the benefit of the
Company.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. TERM OF AGREEMENT. The term of this Agreement shall commence on the
effective date hereof and terminate on December 31, 2000, unless sooner
terminated as hereinafter provided.
2. DUTIES AND PERFORMANCE.
(a) During the term of this Agreement, Employee shall be employed by
the Company on a full-time basis as its Executive Vice President and Chief
Financial Officer and shall have such authority and shall perform such
duties consistent with his position as may be reasonably assigned to him
and shall report to the Chief Executive Officer of the Company or any other
person designated by the Board of Directors; provided, however, that
without the approval of the Board of Directors of the Company, Employee may
not, on behalf of the Company, (A) enter into term employment arrangements
for the Company's employees, (B) borrow funds or make material capital
expenditures or commitments, (C) sell common stock or any other security
of the Company or acquire or sell any subsidiary of the Company, (D) alter
or adopt any employee benefit plans, or (E) adopt or maintain any employee
policy or program different from those of the Company on the effective date
hereof. The Company shall retain full direction and control of the means
and methods by which the Employee performs the above services. Employee
shall use all reasonable efforts to further the interests of the Company
and shall devote substantially all of his business time and attention to
his duties hereunder.
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(b) Except with the prior written approval of the Board of Directors
(which the Board of Directors may grant or withhold in their sole
discretion), Employee, during the term of this Agreement, will not (i)
accept any other employment, (ii) serve on the board of directors or
similar body of any other business entity, or (iii) engage, directly or
indirectly, in any other business activity (whether or not pursued for
pecuniary advantage) that is or may be competitive with, or that might
place him in a competing position to, that of the Company or any of its
affiliates.
(c) Employee shall be entitled to be reimbursed in accordance with the
policies of the Company, as adopted and amended from time to time, for all
reasonable and necessary expenses incurred by him in connection with the
performance of his duties of employment hereunder; provided Employee shall,
as a condition of such reimbursement, submit verification of the nature and
amount of such expenses in accordance with the reimbursement policies from
time to time adopted by the Company.
3. BASE SALARY AND OTHER COMPENSATION.
(a) Base Salary. The Company shall pay to Employee a base salary at
the rate of $125,000 per annum through the term of this Agreement, as
specified in Section 1 hereof, payable semi-monthly on the 15th and the
last day of the month as per the normal pay practices of the Company (e.g.,
standard employee deductions such as income tax withholdings, social
security, etc.). The base salary shall be reviewed in connection with
Employee's annual performance review and may be increased in the sole
discretion of the Board of Directors.
(b) Incentive Compensation. In addition to base salary, Employee
shall be entitled during the term of this Agreement to participate in an
incentive compensation plan developed for Employee (or for Employee and
other similarly situated individuals within the Company), subject to
meeting the requirements set forth in such plan for benefits. The
incentive compensation plan applicable to Employee for calendar 1998 will
be determined following final approval of the Company's 1998 budget.
4. BENEFITS.
(a) When eligible under non-discriminatory standards, Employee shall
be entitled to participate in any employee benefit plans maintained by the
Company for its full time employees. The Company shall pay or reimburse
Employee for one-half (1/2) of the cost of health insurance for Employee
and his dependents. Employee shall be entitled to two (2) weeks vacation
per annum and such holidays as the Company may establish as company policy.
As a senior officer, Employee may receive additional vacation or paid leave
as approved by the Chief Executive Officer in his sole discretion. Nothing
herein, however, is intended or shall be construed to require the Company
to institute or continue all, or any particular, plan or benefits.
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(b) The Company shall provide Employee with an automobile selected by
the Company for business use and shall pay or reimburse Employee for
automobile expenses actually incurred. Employee shall provide the Company
with records regarding automobile usage in accordance with the Company's
reporting policy.
5. TERMINATION OF AGREEMENT.
(a) Employee's employment hereunder shall or may be terminated, as the
case may be, under the following circumstances:
(i) the Company may terminate Employee's employment hereunder
for "cause" by delivery of a written notice to Employee concerning the
same. "Cause" shall mean by reason of any of the following: (A)
Employee's conviction of, or plea of nolo contendere to, any felony or
to any crime or offense causing substantial harm to the Company or any
of its affiliates (whether or not for personal gain) or involving acts
of theft, fraud, embezzlement, moral turpitude or similar conduct, (B)
Employee's violation of the Company's substance abuse policy, (C)
misconduct in the conduct of employee's duties, including, but not
limited to, (1) willful and intentional misuse or diversion of the
Company's or any of its affiliate's funds, (2) embezzlement, and (3)
fraudulent or willful and material misrepresentations or concealments
on any written reports submitted to the Company or any of its
affiliates, (D) material failure to perform the duties of Employee's
employment or his habitual neglect thereof, (E) material failure to
follow or comply with the reasonable and lawful written directives of
the Chief Executive Officer or Board of Directors of the Company, (F) a
material breach by Employee of the provisions of Section 6 of this
Agreement, provided, however, that in the case of the foregoing clauses
(D), (E) and (F), Employee shall have been informed, in writing, of
such material failure referred to in the foregoing clauses (D), (E) and
(F), respectively, and provided with a reasonable opportunity to cure
such material failure, if such failure is subject to cure;
(ii) Employee's employment hereunder shall terminate if, because
of a mental or physical disability or infirmity, Employee is unable to
perform the essential functions of such person's duties, with or
without reasonable accommodation, for a consecutive period of ninety
(90) days or a non-consecutive period of one hundred twenty (120) days
during any twelve month period, or such other period as may be required
by applicable employment laws; or
(iii) upon the death of Employee;
(iv) the Employee hereby agrees that the Company may dismiss him
under this Section 5 by delivery from the Company to Employee of
written notice of such dismissal, without regard (A) to any general or
specific policies (whether written or oral) of the Company relating to
the employment or termination of its employees, or
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(B) to any statements made to Employee, whether made orally or
contained in any document, pertaining to Employee's relationship with
the Company. Notwithstanding anything to the contrary contained
herein, including in Section 1 of this Agreement, the Employee's
employment with the Company is not for any specified term and may be
terminated by the Company at any time, for any reason, with or without
cause, without liability except with respect to the payments provided
for by Section 5(b);
(v) the Employee may voluntarily resign his position and
terminate his employment with the Company at any time by delivery of a
written notice of resignation to the Company (the "Notice of
Resignation"). The Notice of Resignation shall set forth the date such
resignation shall become effective (the "Date of Resignation"), which
date shall, in any event, be no more than thirty (30) days from the
date the Notice of Resignation is delivered to the Company; provided
the Company shall, in its discretion and by sending written notice to
Employee, be entitled to deem the Employee's resignation effective at
any time within such thirty day period, and such date specified by the
Company shall then become the "Date of Resignation". Notwithstanding
any such action by the Company, Employee's severance and his rights
thereunder shall be set as if the Employee voluntarily resigned; or
(vi) if not terminated sooner pursuant to Sections 5(a)(i)
through 5(a)(v) above, the Employee's employment hereunder shall
terminate December 31, 2000; provided, however, the Company and
Employee may elect to extend the term of Employee's employment and/or
enter into a new employment agreement.
(b) In the event of the termination of Employee's employment:
(i) pursuant to Section 5(a)(i) hereof, then as of the Date of
Termination all of the Company's obligations hereunder, including,
without limitation, the Company's obligations to pay Employee's base
salary accruing after the date of such termination, and any benefits
(except as otherwise required by applicable law), other than those
obligations which have accrued but remain unpaid as of the Date of
Termination (such as accrued but unpaid salary, expense reimbursements,
health insurance premiums, retirement plan contributions, if any,
vacation pay, sick pay, etc.), shall cease;
(ii) pursuant to Section 5(a)(ii) hereof, then all of the
Company's obligations hereunder (including without limitation the
Company's obligations to pay Employee's base salary accruing after the
Date of Termination, and any benefits), other than those obligations
which have accrued but remain unpaid as of the Date of Termination
(such as accrued but unpaid salary, expense reimbursements, health
insurance premiums, retirement plan contributions, if any, vacation
pay, sick pay, etc.) shall cease as of the Date of Termination;
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(iii) pursuant to Section 5(a)(iii) hereof, then all of the
Company's obligations hereunder (including without limitation the
Company's obligations to pay Employee's base salary accruing after the
Date of Termination, and any benefits), other than those obligations
which have accrued but remain unpaid as of the Date of Termination
(such as accrued but unpaid salary, expense reimbursements, health
insurance premiums, retirement plan contributions, if any, vacation
pay, sick pay, etc.) shall cease as of the Date of Termination;
(iv) pursuant to Section 5(a)(iv) hereof, then in such event the
Company shall (a) continue to pay Employee's base salary (without
offset for any compensation received by Employee from any subsequent
employment by any person, other than by an affiliate of the Company or
in violation of Section 6 hereof) and to provide for the continuation
of any Company health insurance benefits for which he would be eligible
but for such termination on the basis in effect at the Date of
Termination, subject to the Company's right to amend, modify or
terminate any such plan, for a period which is equal to the remaining
term of this Agreement, and (b) pay the earned portion, if any, of any
incentive compensation applicable to Employee through the Date of
Termination;
(v) pursuant to Section 5(a)(v) hereof, then as of the Date of
Termination all of the Company's obligations hereunder, including,
without limitation, the Company's obligations to pay Employee's base
salary accruing after the Date of Termination, and any benefits (except
as otherwise required by applicable law), other than those obligations
which have accrued but remain unpaid as of the Date of Termination
(such as accrued but unpaid salary, expense reimbursements, health
insurance premiums, retirement plan contributions, if any, vacation
pay, sick pay, etc.) shall cease; and
(vi) pursuant to Section 5(a)(vi) hereof, then as of the Date of
Termination all of the Company's obligations hereunder, including,
without limitation, the Company's obligations to pay the Employee's
base salary accruing after the Date of Termination, and any benefits
(except as otherwise required by applicable law), other than those
obligations which have accrued but remain unpaid as of the Date of
Termination (such as accrued but unpaid salary, expense reimbursements,
health insurance premiums, retirement plan contributions, if any,
vacation pay, sick pay, etc.), shall cease.
(c) "Date of Termination" shall mean (i) if Employee's employment is
terminated pursuant to Section 5(a)(i), the date specified in the written
notice of termination delivered to Employee by the Company, (ii) if the
Employee's employment is terminated pursuant to Section 5(a)(ii), the date
which is (A) the ninetieth (90th) consecutive day of such inability or (B)
the one hundred and twentieth (120th) day in any twelve (12) month period
of such inability, in each case as determined by the Board of Directors,
(iii) if Employee's employment is terminated pursuant to Section 5(a)(iii),
the date of his death, (iv) if
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Employee's employment is terminated pursuant to Sections 5(a)(iv), the date
specified in the written notice of termination delivered to Employee by the
Company, (v) if Employee's employment is terminated pursuant to Section
5(a)(v), the Date of Resignation, and (vi) if Employee's employment is
terminated pursuant to Section 5(a)(vi), December 31, 2000.
(d) The Employee hereby acknowledges and agrees that all personal
property and equipment furnished to or prepared by the Employee in the
course of or incident to his employment, belongs to the Company and shall
be promptly returned to the Company upon termination of the Employee's
employment hereunder. "Personal Property" includes, without limitation,
all books, manuals, records, reports, notes, contracts, lists, blueprints,
and other documents, or materials, or copies thereof (including computer
files), and all other proprietary information relating to the business of
the Company. Following termination, Employee will not retain any written
or other tangible material containing any proprietary information of the
Company. Upon termination of Employee's employment hereunder, Employee
shall be deemed to have resigned from all offices and directorships then
held with the Company or any affiliate.
6. COVENANT NOT TO COMPETE; CONFIDENTIALITY.
(a) Employee acknowledges that in the course of his employment by the
Company he has and will become privy to various economic and trade secrets
and relationships of the Company and its affiliates. Therefore, in
consideration of this Agreement, Employee hereby agrees that neither he nor
his spouse nor any other member of his immediate family that resides with
his will, directly or indirectly, except for the benefit of the Company or
its affiliates, or with the prior written consent of the Board of Directors
of the Company, which consent may be granted or withheld at the sole
discretion of the Company's Board of Directors:
(i) during the Noncompetition Period (as hereinafter defined)
become an officer, director, stockholder, partner, member, manager,
associate, employee, owner, agent, creditor, independent contractor,
co-venturer, consultant or otherwise, or encourage, counsel, advise or
financially assist or support his spouse or any other member of his
immediate family that resides with him to be or become, or himself be
or become interested in or associated with any person, corporation,
firm or business engaged in a Staffing Services Business (as
hereinafter defined) in the States of Indiana, Michigan and, outside
such states, within a radius of fifty (50) miles from any office,
including client on site offices, operated during the Noncompetition
Period by the Company or any of its affiliates (the "Territory"), or in
any Staffing Services Business directly competitive with that of the
Company or any of its affiliates, or himself engage in such business;
provided, however, that:
(A) nothing herein shall be construed to prohibit
Employee from owning not more than five percent (5%) of any class
of securities issued by
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an entity which is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, or which is traded
over the counter; and
(B) the foregoing shall not restrict Employee with
respect to businesses, other than Staffing Services Businesses,
engaged in by the Company or its affiliates during the
Noncompetition Period unless employee either is or was
substantially involved in such other businesses of the Company or
such affiliates or had access to Confidential Information (as
hereinafter defined) with respect to such other businesses;
(ii) during the Noncompetition Period in the Territory, solicit,
cause or authorize, directly or indirectly, to be solicited for or on
behalf of himself or third parties, from parties who are, or within the
preceding three hundred sixty (360) days were, customers of the Company
or its affiliates, any Staffing Services Business transacted by or with
such customer by the Company or its affiliates;
(iii) during the Noncompetition Period in the Territory, accept or
cause or authorize, directly or indirectly, to be accepted for or on
behalf of himself or for third parties, any such Staffing Services
Business from any such customers of the Company or its affiliates;
(iv) during the Noncompetition Period in the Territory, solicit,
cause or authorize, directly or indirectly, to be solicited for or on
behalf of himself or third parties, from parties who are, or within the
preceding three hundred sixty (360) days were, customers of the Company
or its affiliates with whom Employee had business contacts on behalf of
the Company or any of its affiliates, any Staffing Services Business or
any other business transacted with such customer by the Company or its
affiliates;
(v) during the Noncompetition Period, use, publish, disseminate
or otherwise disclose, directly or indirectly, any information
heretofore or hereafter acquired, developed or used by the Company or
its affiliates relating to its business or the operations, employees or
customers of the Company or its affiliates which constitutes
proprietary or confidential information of the Company or its
affiliates, including without limitation, any information contained in
any customer lists, mailing lists and sources thereof, statistical data
and compilations, patents, copyrights, trademarks, trade names,
inventions, formulae, methods, processes, agreements, contracts,
manuals or any other documents (collectively, "Confidential
Information"), but excluding any Confidential Information which has
become part of common knowledge or understanding or publicly available
in the industry or otherwise in the public domain (other than from
disclosure by Employee in violation of this Agreement); or
(vi) during the Noncompetition Period, in the Territory,
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(A) solicit, entice, persuade or induce, directly or
indirectly, any employee (or person who within the preceding three
hundred sixty [360] days was an employee) of the Company or its
affiliates or any other person who is under contract with or
rendering services to the Company or its affiliates, to terminate
their employment by, or contractual relationship with, such person
or to refrain from extending or renewing the same (upon the same
or new terms) or to refrain from rendering services to or for such
person or to become employed by or to enter into contractual
relations with any persons other than such person or to enter into
a relationship with a competitor of the Company or its affiliates,
(B) approach any such employee for any of the foregoing
purposes, or
(C) authorize or knowingly approve or assist in the
taking of any such actions by any person other than the Company or
its affiliates.
(b) For purposes of this Agreement, the term "Noncompetition Period"
shall mean the period commencing on the date hereof and ending (i) eighteen
months after the date Employee ceases to be an officer or employee of the
Company, or any of its affiliates or (ii) the date Employee ceases to be an
officer or employee of the Company, or any of its affiliates if Employee is
terminated other than for cause.
(c) For purposes of this Agreement, the term "Staffing Services
Business" shall mean a firm which recruits, trains and/or tests employees
and assigns them to clients (i) to provide staffing help services for such
client to support or supplement the client's work force in work situations
such as employee absences, temporary skill shortages, seasonal workloads
and special assignments and projects, (ii) to provide staffing help
services for such client for short-term and long-term temporary placement
and temporary to permanent arrangements for the client to eventually hire
the service provider as its own employee, and (iii) to provide permanent
individual employees for permanent employment placement fees.
(d) The invalidity or non-enforceability of this Section 6 in any
respect shall not affect the validity or enforceability of this Section 6
in any other respect or of any other provisions of this agreement. In the
event that any provision of this Section 6 shall be held invalid or
unenforceable by a court of competent jurisdiction by reason of the
geographic or business scope or the duration thereof, such invalidity or
unenforceability shall attach only to the scope or duration of such
provision and shall not affect or render invalid or unenforceable any other
provision of this agreement, and, to the fullest extent permitted by law,
this Agreement shall be construed as if the geographic or business scope or
the duration of such provision had been more narrowly drafted so as not to
be invalid or unenforceable.
(e) Employee acknowledges that the Company's remedy at law for any
breach of the provisions of this Section 6 is and will be insufficient and
inadequate and that the
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Company shall be entitled to equitable relief, including by way of
temporary and permanent injunction, in addition to any remedies the Company
may have at law.
(f) The provisions of this Section 6 shall survive termination of this
Agreement.
7. NOTICE. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered, when
transmitted by telecopy with receipt confirmed, or one day after delivery to an
overnight air courier guaranteeing next day delivery, addressed as follows:
If to Employee: Xxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
If to the Company: CSR, Inc.
One Michiana Square
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Chief Executive Officer
With a copy to: Xxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxxxx
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
8. DIVISIBILITY OF AGREEMENT. In the event that any term, condition or
provision of this Agreement is for any reason rendered void, all remaining
terms, conditions and provisions shall remain and continue as valid and
enforceable obligations of the parties hereto.
9. CHOICE OF LAW. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Indiana (without reference to the choice of law provisions of Indiana law),
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters of the law of the jurisdiction under which the
respective entity derives its powers shall govern.
10. ARBITRATION. Notwithstanding anything herein to the contrary, in the
event that there shall be a dispute among the parties arising out of or relating
to this Agreement, or the breach thereof, the parties agree that such dispute
shall be resolved by final and binding arbitration in Chicago, Illinois,
administered by AAA, in accordance with AAA's Commercial Arbitration Rules then
in effect. Depositions may be taken and other discovery may be obtained during
such
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arbitration proceedings to the same extent as authorized in civil judicial
proceedings. Any award issued as a result of such arbitration shall be final
and binding between the parties thereto, and shall be enforceable by any court
having jurisdiction over the party against whom enforcement is sought. The fees
and expenses of such arbitration (including reasonable attorneys' fees) or any
action to enforce an arbitration award shall be paid by the party that does not
prevail in such arbitration.
11. LIMITATION ON LIABILITIES. If Employee is awarded any damages as
compensation for any breach or action related to this Agreement, a breach of any
covenant contained in this Agreement (whether express or implied by either law
or fact), or any other cause of action based in whole or in part on any breach
of any provision of this agreement, such damages shall be limited to contractual
damages and shall exclude (i) punitive damages, and (ii) consequential and/or
incidental damages (e.g., lost profits and other indirect or speculative
damages). The maximum amount of damages that Employee may recover for any
reason shall be the amount equal to all amounts owed (but not yet paid) to
Employee pursuant to this Agreement through its natural term or through any
period for which severance is due pursuant to Section 5(b) hereof.
12. COMPLETE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the employment of Employee and supersedes all
prior arrangements or understandings with respect thereto and all oral or
written employment agreements or arrangements between the Company (and any of
its subsidiaries) and Employee. This Agreement may not be altered or amended
except by a writing, duly executed by the party against whom such alteration or
amendment is sought to be enforced.
13. ASSIGNMENT. This Agreement is personal and non-assignable by Employee.
It shall inure to the benefit of any corporation or other entity with which the
Company shall merge or consolidate or to which the Company shall lease or sell
all or substantially all of its assets and may be assigned by the Company to any
affiliate of the Company or to any corporation or entity with which such
affiliate shall merge or consolidate or which shall lease or acquire all or
substantially all of the assets of such affiliate; provided that as a condition
to such sale of assets or merger, the purchaser or surviving company, as the
case may be, shall have assumed the obligations of the Company under this
Agreement.
14. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
15. EMPLOYEE'S ACKNOWLEDGMENT. Employee acknowledges (a) that he has
consulted with or has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement and has been advised to do so by
the Company, and (b) that he has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own
judgment.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
in multiple counterparts as of the day and year first above written.
________________________________________
Xxxxxx X. Xxxxxx
CSR, INC.
By______________________________________
Xxxxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
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