EXHIBIT 10.1
Draft of July 24, 2000
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of July 26, 2000, is entered
into between Technisource, Inc., a Florida corporation (the "Company"), and
Xxxxxx Xxxx (the "Employee").
Recitals
A. The Company desires to engage Employee as a senior executive
and as an important member of its management team, and
Employee has agreed to be employed by the Company in such
capacity, all on the terms set forth in this Agreement.
Agreement
For and in consideration of the foregoing and of the mutual covenants
of the parties herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. Employment. The Company hereby employs Employee to serve in the capacities
described herein and Employee hereby accepts such employment and agrees to
perform the services described herein upon the terms and conditions hereinafter
set forth.
2. Term. The term of Employee's employment pursuant to this Agreement shall
commence as of the date hereof and shall continue for a period of three (3)
years, subject to earlier termination in accordance with Section 7 hereof and
the other terms, provisions, and conditions set forth herein. Sixty days prior
to the end of the term of the Agreement (or any renewal term), either the
Company or the Employee may give notice to the other of its determination not to
renew this Agreement. If a notice of non-renewal is not delivered, this
Agreement will automatically continue in effect for successive one (1) year
renewal terms. If such notice of non-renewal is given by any party, then
Employee's employment will terminate at the end of such term (or on such other
date as the parties mutually agree).
3. Duties. Employee shall serve as and have the title of Chief Financial Officer
of the Company. Employee agrees to devote substantially all of his time, energy,
and skills to such employment while so employed.
4. Compensation.
(a) Base Compensation. The Company shall pay Employee, and Employee
agrees to accept, base compensation at the rate of $170,000 per year in
equal, monthly installments from the effective date hereof through the end of
the term of this Agreement ("Base Compensation"). The Base Compensation
specified in this Section 4(a) may be adjusted, but not decreased, at any time
during the term of this Agreement in the discretion of the Board of Directors
and will be reviewed no less frequently than during the first quarter of each
calendar year.
(b) Bonus Compensation. Employee shall receive an annual bonus ("Bonus
Compensation") payable within 90 days following the end of each fiscal year of
the Company during the term of Employee's employment under this Agreement. The
amount of Employee's annual Bonus Compensation shall be equal to 5% of the
growth in the Company's earnings without including interest payments and taxes
("EBIT") quarter over quarter paid out on a quarterly basis within 60 days
following the end of such quarter. The Bonus Compensation payable by the Company
for any partial year of employment of Employee shall be prorated based on the
number of complete months Employee was employed by the Company during such year.
Employee's Bonus Compensation for the fiscal year ending December 31, 2000 shall
be a minimum of $40,000 in the aggregate.
(c) Stock Option Award. The Company has awarded Employee an aggregate
of 150,000 stock options on the terms and in the form attached hereto as Exhibit
A and Exhibit B.
5. Fringe Benefits.
(a) Generally. Employee shall be eligible for fringe benefits pursuant
to any health insurance, other insurance, pension or other employee fringe
benefit plan approved by the Board of Directors that now or hereafter may be
made available to employees of the Company and for which Employee will qualify
according to his eligibility under the provisions thereof; provided, however,
that such eligibility specifically does not apply to matters relating to
Employee's vacation, disability benefits, automobile and compensation, which
matters shall be governed exclusively by the terms hereof.
(b) Vacation. During the term of this Agreement, Employee shall be
entitled to three weeks paid vacation per calendar year and any vacation time
not taken during any calendar year shall not be carried over into subsequent
calendar years.
(c) Automobile. The Company agrees to provide Employee an automobile
allowance in the amount of $600.00 per month during the term of this agreement.
6. Expenses.
(a) General. During the period of his employment, Employee shall be
reimbursed for his business-related expenses, including mobile phone charges and
Tower Club membership fees, incurred on behalf of the Company in accordance with
the travel and entertainment expense policy of the Company as adopted by the
Board of Directors from time to time and in effect at the time the expense was
incurred. Employee agrees to maintain such records and documentation of all such
expenses to be reimbursed by the Company hereunder as the Company shall require
and in such detail as the Company may reasonably request. Such expenses shall
not include automobile related expenses.
(b) Relocation. The Company agrees to pay Employee's reasonable
relocation expenses. Employee will seek at least two competitive bids in order
to minimize such expenses. The Company will also pay Employee's local apartment
expenses for up to 6 months from the date of this Agreement and for travel from
Ft. Lauderdale, Florida to Chicago, Illinois for two round trip flights per
month during such 6 month period.
7. Termination. The term of Employee's employment under this Agreement may be
terminated prior to expiration of the term provided in Section 2 hereof in
accordance with the following paragraphs. Any termination of the Employee's
employment by the Company for Cause or otherwise shall be communicated by Notice
of Termination to the Employee given in accordance with Section 14 hereof. A
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date, which date shall not be more than sixty (60)
calendar days after the giving of such notice.
(a) Mutual. Employee's employment under this Agreement may be
terminated upon the mutual written agreement (which may include, if so agreed to
by the Board of Directors and Employee, severance payments and/or benefits) of
the Company and Employee.
(b) Death. In the event of the death of Employee, Employee's employment
under this Agreement shall be deemed terminated.
(c) Disability. If, during Employee's employment under this Agreement,
Employee shall become disabled and unable to perform his duties as required
herein ("Disability") for a consecutive period of one hundred twenty (120) days,
then the Company may, upon thirty (30) days' written notice to Employee,
terminate Employee's employment under this Agreement.
(d) Cause. Employee's employment under this Agreement may be terminated
by the Company, with or without Cause as herein defined, upon giving Employee
thirty (30) days written notice. For purposes of this Agreement, the term
"Cause" shall mean the termination of the Employee by the Board of Directors of
the Company as a result of the existence or occurrence of one or more of the
following conditions or events:
(i) An act or acts of fraud, misappropriation, or
embezzlement on the Employee's part that result in or
are intended to result in his personal enrichment at
the expense of the Company or its subsidiaries or
affiliates.
(ii) Commission of a felony involving moral turpitude or
violation of securities laws.
(iii) The Employee's willful or intentional failure to
perform his duties as required under this Agreement;
provided, that the Company shall provide Employee with
written notice of such failure and Employee shall have
ten (10) days from the date Employee receives such
notice to remedy such failure to perform.
(iv) Any material breach of the terms of this Agreement by
Employee.
(v) Substantial and continuing neglect or inattention by
Employee of or to the duties described in Section 3
hereof.
Notwithstanding the foregoing, it shall not be deemed a termination for
"Cause" under this Agreement in the event that Employee terminates his
employment for "Good Reason." For purposes of this Agreement, Good Reason shall
mean (i) a material diminishment in the duties or title of Employee or (ii) a
decrease in Employee's Base Compensation payable under this Agreement to an
amount less than $170,000.
8. Death And Disability. In the event of the termination of Employee's
employment under this Agreement by reason of the Employee's death or Disability,
the Company shall pay Employee (or his heirs and/or personal representatives)
the payments and benefits indicated below:
(a) Termination due to death. In the event of Employee's death, this
Agreement shall terminate immediately, and the Company shall pay to Employee's
estate or legal representative Employee's Base Compensation through the date of
Employee's death. Subject to Section 5(b), this Agreement does not obligate the
Company to make any other payment to Employee's estate or legal representative
in the event of the Employee's death.
(b) Disability. In the event of Employee's Disability, from and after
the Disability Date, Employee shall receive, instead of his Base Compensation or
any
other compensation payable by the Company under this Agreement, the
disability benefits to which Employee is entitled under any and all disability
benefit plans provided by or made available to Employee by the Company.
9. Severance. In the event of the early termination of Employee's employment
under this Agreement for any reason other than Employee's death or disability,
the Company shall provide the payments and benefits to Employee as indicated
below:
(a) With Cause or Voluntary Resignation. If Employee is terminated for
Cause (as defined in Section 7(d) of this Agreement), or if Employee voluntarily
terminates his employment by the Company, the Company shall pay Employee, within
five (5) business days after the date of termination, Employee's Base
Compensation and unused vacation entitlement through such date of termination,
and the Company shall have no further obligation to provide compensation or
benefits to Employee under this Agreement; except that, to the extent that the
Company's insurance, stock option and other benefit plans provide certain rights
and benefits after an employee's termination, Employee may continue to receive
such rights and benefits in accordance with the terms of such plans.
(b) Without Cause. If terminated by the Company without Cause, Employee
shall receive the Base Compensation and Bonus Compensation until the later to
occur of the date twelve (12) months from the date of such termination and the
end of the term (or any renewal term) of this Agreement.
10. Confidential Information. Employee recognizes and acknowledges that he will
have access to certain confidential information of the Company and of
corporations with whom the Company does business, and that such information
constitutes valuable, special and unique property of the Company and such other
corporations. During the term of this Agreement and for a period of five (5)
years immediately following the date of termination of this Agreement, Employee
agrees not to disclose or use any confidential information, including without
limitation, information regarding research, developments, "know-how," prices,
suppliers, customers, costs or any knowledge or information with respect to
confidential or trade secrets of the Company, it being understood that such
confidential information does not include information that is publicly available
unless such information became publicly available as a result of a breach of
this Agreement. Employee acknowledges and agrees that all notes, records,
reports, sketches, plans, unpublished memoranda or other documents belonging to
the Company, but held by Employee, concerning any information relating to the
Company's business, whether confidential or not, are the property of the Company
and will be promptly delivered to it upon Employee's leaving the employ of the
Company. Employee also agrees to execute such confidentiality agreements that
the Board may adopt, and may modify from time to time, as a standard form to be
executed by all employees of the
Company, to the extent such standard forms are not materially more restrictive
than the provisions of this Agreement.
Employee shall not disclose to the Company or induce the Company to use
any secret or confidential information or material belonging to others,
including former employers. Employee agrees to defend, indemnify and hold
harmless the Company from all claims, actions, losses or damages (including
reasonable attorney's fees) arising out of any restrictive covenants or
confidentiality obligations of Employee to any third party.
11. Intellectual Property. Employee acknowledges and agrees that all
discoveries, inventions, designs, improvements, ideas, writings, copyrights,
publications, computer data or programs, or other intellectual property, whether
or not subject to patent or copyright laws, which Employee shall conceive solely
or jointly with others, in the course or scope of his employment with the
Company or in any way related to the Company's business, whether during or after
working hours, or with the use of the Company's equipment, materials or
facilities (collectively referred to herein as "Intellectual Property"), shall
be the sole and exclusive property of the Company without further compensation
to Employee. As used in this Section 11 and the following Section 12, it is
understood that the Company's principal "business" is providing IT consultant
staffing and services and sales of computer hardware and equipment. Employee
shall take such steps as are deemed necessary to maintain complete and current
records of the Intellectual Property conceived by the Employee, and Employee
shall assign to the Company or its designees, the entire right, title and
interest in said Intellectual Property.
12. Non-Competition. Employee acknowledges that his services to be rendered
hereunder are of a special and unusual character that have a unique value to the
Company and the conduct of its business, the loss of which cannot adequately be
compensated by damages in an action at law. In view of the unique value to the
Company of the services of Employee for which the Company has contracted
hereunder, and because of the confidential information to be obtained by or
disclosed to Employee as herein above set forth, and as a material inducement to
the Company to enter into this Agreement and to pay and make available to
Employee the compensation and other benefits referred to herein, Employee
covenants and agrees that Employee will not, directly or indirectly, whether as
principal, agent, trustee or through the agency of any corporation, partnership,
association or agent (other than as the holder of not more than 5% of the total
outstanding stock of any company the securities of which are traded on a regular
basis on recognized securities exchanges):
(a) while employed under this Agreement and for any period during which
Employee is receiving payments from the Company (pursuant to Section 8 hereof)
following a termination as a result of Employee's Disability, (i) work for (in
any capacity, including without limitation director, officer or employee) any
other
business or IT staffing or consulting company that competes with the Company and
is located in the United States or operates within 50 miles of any branch office
of the Company, or (ii) recruit, or otherwise influence or attempt to induce
employees of the Company to leave the employment of the Company; and
(b) for the one-year period immediately following the termination of
this Agreement due to the expiration of the term of this Agreement, termination
of Employee for Cause, or Employee's voluntary resignation; and for the one year
period immediately following the last date on which Employee shall receive
payments from the Company pursuant to Section 8 hereof following a termination
of employment as a result of Employee's Disability, work for a company or
business (in any capacity, including without limitation as director, officer, or
employee) that is in the business of providing IT staffing or consultant
services that competes with the Company and is located in the United States or
operates within 50 miles of any branch office of the Company.
Employee has carefully read and considered the provisions of Sections
10, 11, and 12 hereof and agrees that the restrictions set forth in such
sections are fair and reasonable and are reasonably required for the protection
of the interests of the Company, its officers, directors, shareholders, and
other employees, for the protection of the business of the Company, and to
ensure that Employee devotes his full-time and efforts to the business of the
Company. Employee acknowledges that he is qualified to engage in businesses
other than those that are subject to this Section 12. It is the belief of the
parties, therefore, that the best protection that can be given to the Company
that does not in any way infringe upon the rights of Employee to engage in any
unrelated businesses is to provide for the restrictions described above. In view
of the substantial harm which would result from a breach by Employee of Sections
10, 11 and 12, the parties agree that the restrictions contained therein shall
be enforced to the maximum extent permitted by law. In the event that any of
said restrictions shall be held unenforceable by any court of competent
jurisdiction, the parties hereto agree that it is their desire that such court
shall substitute a reasonable judicially enforceable limitation in place of any
limitation deemed unenforceable and that as so modified, the covenant shall be
as fully enforceable as if it had been set forth herein by the parties.
13. Remedies. The provisions of sections 10, 11 and 12 of this Agreement shall
survive the termination of this Agreement as set forth therein, regardless of
the circumstances or reasons for such termination, and inure to the benefit of
the Company. The restrictions set forth in Sections 10, 11 and 12 are considered
to be reasonable for the purposes of protecting the business of the Company. The
Company and Employee acknowledge that the Company would be irreparably harmed
and that monetary damages would not provide an adequate remedy to the Company if
the covenants contained in Sections 10, 11 and 12 were not complied with in
accordance with their terms. Accordingly, Employee agrees that the Company shall
be entitled to injunctive and other equitable relief to secure the
enforcement of these provisions, in addition to any other remedy which may be
available to the Company. In addition, if the Company prevails on a claim
brought pursuant to the provisions of Sections 10, 11, or 12, whether or not an
award or judgement is entered in its favor, the Company shall be entitled to
receive from Employee reimbursement for reasonable attorneys' fees and expenses
incurred by the Company in enforcing such provisions.
14. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by registered mail to the
addresses below or to such other address as either party shall designate by
written notice to the other:
If to the Employee: To the address set forth below his signature on the
signature page hereof.
If to the Company:
Technisource, Inc.
0000 X. Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attention: CEO
15. Entire Agreement; Modification.
(a) This Agreement contains the entire agreement of the Company and
Employee, and the Company and Employee hereby acknowledge and agree that this
Agreement supersedes any prior statements, writings, promises, understandings or
commitments.
(b) No future oral statements, promises or commitments with respect to
the subject matter hereof, or other purported modification hereof, shall be
binding upon the parties hereto unless the same is reduced to writing and signed
by each party hereto.
16. Assignment. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company. The Employee may not assign his rights and obligations
under this Agreement.
17. Full Settlement. The Employee shall not be obligated to seek other
employment by way of mitigation of the amounts payable to the Employee under any
of the provisions of this Agreement. The amounts payable to Employee under this
Agreement shall not be reduced by any compensation payable to Employee from
employment by another employer after the date of Employee's termination provided
such employment does not violate the terms of Section 12 hereof.
18. Miscellaneous.
(a) This agreement shall be subject to and governed by the laws of the
State of Florida, without regard to the conflicts of laws principles thereof.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or the interpretation of this
Agreement.
(c) The failure of any party to enforce any provision of this Agreement
shall in no manner affect the right to enforce the same, and the waiver by any
party of any breach of any provision of this Agreement shall not be construed to
be a waiver by such party of any succeeding breach of such provision or a waiver
by such party of any breach of any other provision.
(d) All written notices required in this Agreement shall be sent
postage prepaid by certified or registered mail, return receipt requested.
(e) In the event any one or more of the provisions of this Agreement
shall for any reason be held invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired, and the invalid, illegal or
unenforceable provision shall be replaced by a mutually acceptable valid, and
enforceable provision which comes closest to the intent of the parties.
(f) This Agreement may be executed in any number of counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same instrument.
NOW THEREFORE, the parties have executed this Employment Agreement as
of the day and year first above written.
TECHNISOURCE, INC., a Florida corporation
By: /s/
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Its:
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Xxxxxx Xxxx
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Exhibit A
(Stock Option- Incentive Stock Options)
Exhibit B
(Stock Option- Non-Qualified Stock Options)
