Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made by and
between General Employment Enterprises, Inc., an Illinois
corporation (the "Company"), and Xxxxxxx X. Xxxxxx, Xx.
("Executive") effective as of August 1, 2001.
1. Duties and Scope of Employment.
(a) Position; Commencement Date. Executive's employment with the
Company pursuant to this Agreement shall commence upon August 1,
2001 (the "Commencement Date"). As of the Commencement Date, the
Company shall employ Executive, and Executive agrees to be employed
by the Company, as its President, Chief Executive Officer and to
serve as Chairman of the Board of Directors of the Company.
(b) Duties; Obligations to the Company. Executive shall report to
the Company's Board of Directors ("Board") and shall perform such
other duties as the Board may from time to time require, consistent
with the general level and type of duties and responsibilities
customarily associated with Executive's position as President and
Chief Executive Officer.
Executive agrees that he will at all times
conscientiously perform all of the duties and obligations required
of him pursuant to the terms of this Agreement. During his
employment, Executive further agrees that he will devote
substantially all of his business time and attention to the
business of the Company. The Company will be entitled to all of
the benefits and profits arising from or incident to all such work
services and advice. Executive will not render commercial or
professional services of any nature to any person or organization,
whether or not for compensation, without the prior written consent
of the Company's Board of Directors. Executive will not directly
or indirectly engage or participate in any business that is
competitive in any manner with the business of the Company.
Nothing in this Agreement will prevent Executive from accepting
speaking or presentation engagements in exchange for honoraria or
from serving on boards of charitable or other organizations, or
from owning no more than one percent (1%) of the outstanding equity
securities of a corporation whose stock is listed on a national
stock exchange, except equity securities of General Employment
Enterprises, Inc.
(c) No Conflicting Obligations. Executive represents and warrants
to the Company that he is under no obligation or commitment,
whether contractual or otherwise, that is inconsistent with his
obligations under this Agreement. Executive's employment will not
infringe or violate the rights of any other person or entity, and
Executive warrants that he will not use or disclose, in connection
with his employment by the Company, any trade secrets or other
proprietary information or intellectual property in which any other
person has any right, title, or interest.
2. Term and Termination.
(a) Term. The term of this Agreement shall begin on August 1,
2001 (the "Commencement Date") and shall continue for a period of
three years; provided, however, the Agreement will be automatically
extended one day for each day that elapses after the Commencement
Date, such that the Agreement shall have a continuous three (3)
year term (the "Term"). The Term shall automatically terminate in
the event of Executive's termination of employment as a result of
Executive's (i) death, (ii) the disability of Executive by injury
or illness, materially and substantially impairing him from
carrying out his duties anticipated under this Agreement for a
period of 90 days or longer as determined by the Board of Directors
of the Corporation, (such disability shall be established by a
certificate from an independent licensed physician, mutually chosen
by the parties); or (iii) the written mutual agreement of the
Parties. Executive's death or disability commencing after
Executive's cessation of active employment shall not result in a
cessation of the Term. Either party may terminate this Agreement
at any time, provided, however, the parties shall continue to be
subject to the post-employment obligations contained in Section
2(b) and Section 9 of this Agreement.
(b) Termination. In the event Executive's employment is
terminated other than as a result of Executive's death or
disability (as defined in paragraph 2(a) hereinabove) and either
(i) by the Company for a reason other than "Cause" or (ii) by the
Executive for "Good Reason," the Executive shall be reimbursed for
any expenses incurred in connection with outplacement assistance
for Executive up to $25,000 and Executive shall continue to receive
the Compensation, Benefits and Perquisites provided under Sections
3 and 4 of this Agreement for the remainder of the Term specified
in Section 2(a), above. For purposes of this Agreement, "Cause"
means (i) conviction of a felony, (ii) an act of dishonesty or
fraud that has a material adverse impact on the business of the
Company, or (iii) gross negligence in the performance of his duties
as Chief Executive Officer of the Company. "Good Reason" means (i)
reduction in the Executive's Compensation under Section 3 of this
Agreement or other terms of employment under Section 4 of this
Agreement, (ii) reduction in the Executive's position with the
Company, or (iii) requirement of Executive's relocation without
Executive's consent to an office more than twenty-five (25) miles
from the Company's current office in Oakbrook Terrace, Illinois.
3. Compensation.
(a) Base Salary. During the Term, the Company shall pay the
Executive as compensation for his services a base salary at the
annualized rate of not less than Four Hundred Fifty Thousand
Dollars ($450,000), less tax and related withholdings. The Board
shall review such base salary annually and may increase such amount
as it determines, but such amount shall not be reduced. Base
salary shall be paid periodically in accordance with normal Company
payroll practices and procedures. The annualized base salary to be
paid to Executive pursuant to this Section 3(a), together with any
subsequent modifications thereto, shall be referred to in this
Agreement as the "Base Salary."
(b) Performance Bonus. Executive shall be eligible to earn an
annual Performance Bonus with a Target Annual Amount equal to one
hundred percent (100%) of his Base Salary for the applicable fiscal
year. Payment of the Performance Bonus shall be based upon the
achievement of individual and Company goals mutually agreed to by
Executive and the Board, or its designee, for each calendar year.
The terms and conditions of this Performance Bonus will be
determined by the Board of Directors on or before November 1 of
each fiscal year. The award of each year's Performance Bonus, if
any, shall be based upon performance criteria to be determined by
the Board or the Board's Compensation Committee after consultation
with Executive. The Company shall pay any performance bonus
payable hereunder on the earlier of (i) thirty (30) days after
completion of the Company's audited financial statements for the
applicable year or (ii) one hundred eighty (180) days after the end
of the applicable year.
4. Vacation, Benefits and Perquisites.
(a) Vacation. Executive will be eligible for paid vacation in
accordance with the Company's vacation policy applicable to
Executive's position and tenure with the Company.
(b) Welfare Benefits. The Company shall provide Executive with
Company paid health, dental, and vision benefits. In addition, the
Company shall provide Executive with (i) life insurance equal to
two (2) times his Base Salary and (ii) disability income insurance
equal to fifty percent (50%) of his Base Salary. It is understood
that the benefits provided to the Executive pursuant to this
subsection (b) may result in imputed compensation to the Executive.
(c) Supplemental Retirement Benefits. In recognition of
Executive's tenure and position with the Company, commencing
January 1, 2002 and for the remainder of Executive's tenure with
the Company, the Company shall establish and maintain a
Supplemental Executive Retirement Plan (the "SERP") and related
"Rabbi" trust to which the Company shall contribute, on a monthly
basis, an amount equal to not less than ten percent (10%) of
Executive's Base Salary for such month. Executive shall be
immediately vested in such amounts, but distributions shall not be
made under such SERP (nor from the related Rabbi trust) until the
Executive's separation from service with the Company or a "Change
in Control" of the Company.
For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if (a) any corporation, person or other
entity (other than the Executive, the Company, a majority-owned
subsidiary of the Company or any of its subsidiaries, or an
employee benefit plan (or related trust) sponsored or maintained by
the Company), including a "group" as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934 becomes the beneficial owner of
stock representing more than the greater of (i) twenty-five percent
(25%) of the combined voting power of the Company's then
outstanding securities or (ii) the percentage of the combined
voting power of the Company's then outstanding securities which
equals (A) ten percent (10%) plus (B) the percentage of the
combined voting power of the Company's outstanding securities held
by such corporation, person or entity on the Commencement Date;
(b)(i) the stockholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into another
corporation other than a majority-owned subsidiary of the Company,
or to sell or otherwise dispose of all or substantially all of the
Company's assets, and (ii) the persons who were the members of the
Board of Directors of the Company prior to such approval do not
represent a majority of the directors of the surviving, resulting
or acquiring entity or the parent thereof; (c) the stockholders of
the Company approve a plan of liquidation of the Company; or (d)
within any period of 24 consecutive months, persons who were
members of the Board of Directors of the Company immediately prior
to such 24-month period, together with any persons who were first
elected as directors (other than as a result of any settlement of a
proxy or consent solicitation contest or any action taken to avoid
such a contest) during such 24-month period by or upon the
recommendation of persons who were members of the Board of
Directors of the Company immediately prior to such 24-month period
and who constituted a majority of the Board of Directors of the
Company at the time of such election, cease to constitute a
majority of the Board.
(d) Perquisites. The Company shall provide Executive with (i) a
Company-paid luxury automobile, (ii) a Company-paid cellular
telephone, (iii) Company-paid membership in a social or lunch club
and a health club, (iv) Company-paid underground parking, and (v)
reimbursement of expenses, up to $3,000 per year, incurred by
Executive for tax and financial planning. It is understood that
all or a portion of the Perquisites provided under this subsection
(d) may result in imputed income to the Executive.
5. Business Expense Reimbursements. During his employment,
Executive shall be authorized to incur ordinary, necessary, and
reasonable travel, entertainment, and other business expenses in
connection with his duties hereunder. The Company shall reimburse
Executive for such reasonable expenses upon presentation of an
itemized account and appropriate supporting documentation, all in
accordance with the Company's generally applicable reimbursement
policies.
6. Equity. The Company shall grant Executive an option pursuant
to the Company's existing Stock Plan or Plans (collectively, the
"Plan") to purchase 50,000 shares of the Company's Common Stock at
its then fair market value. The grant of the Option Shares shall be
contingent upon Executive signing the Company's standard form of
stock option agreement; the exercise of the Option Shares shall be
contingent upon Executive signing the Company's standard form of
stock purchase agreement. The Option Shares shall be subject in
all respects to the terms and conditions of the Plan.
7. Assignment. This Agreement shall be binding upon and inure to
the benefit of (a) the heirs, beneficiaries, executors and legal
representatives of Executive upon Executive's death and (b) the
Company and any successor of the Company. Any such successor of
the Company shall be deemed substituted for the Company under the
terms of this Agreement for all purposes. As used herein,
"successor" shall include any person, firm, corporation or other
business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly acquires all or substantially all
of the assets or business of the Company. Executive may not assign
this Agreement.
8. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall
be deemed given if (a) delivered personally or by facsimile, (b)
one (1) day after being sent by Federal Express or a similar
commercial overnight service, or (c) three (3) days after being
mailed by registered or certified mail, return receipt requested,
prepaid and addressed to the parties or their successors in
interest at the following addresses, or at such other addresses as
the parties may designate by written notice in the manner
aforesaid:
If to the Company: General Employment Enterprises, Inc.
Xxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Secretary
If to Executive: at the last residential address known
by the Company.
9. Non-solicitation, Non-competition and Non-disclosure.
(a) Non-solicitation. During the period commencing on the
Commencement Date and continuing until the second (2nd) anniversary
of the date of termination of Executive's employment, Executive
shall not directly or indirectly solicit or attempt to solicit (on
Executive's own behalf or on behalf of any other person or entity)
the employment or retaining of any employee or consultant of the
Company or any of the Company's affiliates.
(b) Non-competition. During the period commencing on the
Commencement Date and continuing until the second (2nd) anniversary
of the date of termination of Executive's employment, Executive
will not directly or indirectly engage or participate in any
business that is competitive in any manner with the business of the
Company.
(c) Non-disclosure. Executive shall not use for his or any third
party's benefit or, during the period commencing on Executive's
termination of employment, directly or indirectly disclose any
Confidential Information of the Company. Confidential Information
means that information which has commercial value to Company's
business and is confidential or proprietary in nature (including,
without limitation, names and expertise of employees and
consultants, any other technical, business, financial, plans,
strategies and other confidential information). Information that
is or becomes (through no improper action or inaction by the
Executive) generally available to the public shall not be
Confidential Information.
10. Severability. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force
and effect without said provision.
11. Mutual Arbitration Agreement. Executive and the Company each
agree, to the extent permitted by law, to arbitrate before a single
neutral arbitrator, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration
Association regarding discovery, any dispute or claim arising out
of, related to, or connected with Executive's employment,
termination of employment, or this Agreement, including the
interpretation, validity, construction, performance, breach, or
termination thereof, including any claim against any current or
former agent or employee of the Company, whether the dispute or
claim arises in tort, contract, or pursuant to a statute,
regulation, or ordinance now in existence or which in the future
may be enacted or recognized, including, but not limited to any
claim for fraud, promissory estoppel, breach of contract, breach of
the covenant of good faith and fair dealing, wrongful termination,
infliction of emotional distress, defamation, interference with
contract or prospective economic advantage, unfair business
practices, any claim under any and all federal, state, or municipal
statutes, regulations, or ordinances that prohibit discrimination,
harassment, or retaliation of any kind, any claim for non-payment
or incorrect payment of wages, commissions, bonuses, severance, or
employee fringe benefits, and any claim regarding stock or stock
options, except that any dispute or claim for workers' compensation
benefits or unemployment insurance benefits shall be excluded from
this mutual agreement to arbitrate.
12. Entire Agreement. This Agreement, and the stock documents, if
executed, referenced in Section 6, represent the entire agreement
and understanding between the Company and Executive concerning
Executive's employment relationship with the Company, and supersede
and replace any and all prior agreements and understandings
concerning Executive's employment relationship with the Company.
13. No Oral Modification, Cancellation or Discharge. This
Agreement may only be amended, canceled or discharged in writing
signed by Executive and an authorized member of the Board or
authorized officer.
14. Governing Law. This Agreement shall be governed by the laws
of the State of Illinois without reference to rules relating to
conflicts of law.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
16. Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his
private attorney, has had sufficient time to, and has carefully
read and fully understands all the provisions of this Agreement,
and is knowingly and voluntarily entering into this Agreement.
IN WITNESS WHEREOF, the undersigned parties agree to all the
promises, covenants and terms contained herein:
GENERAL EMPLOYMENT ENTERPRISES, INC.
/s/ Xxxxxxx Xxxxxxxx Date: October 5, 2001
By: Xxxxxxx Xxxxxxxx
Title: Chairman of the Compensation Committee
and member of the Board of Directors
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx, Xx. Date: October 5, 2001
Xxxxxxx X. Xxxxxx, Xx.
