1
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 12th day of December, 1996, between
COMPLETE BUSINESS SOLUTIONS, INC., a Michigan corporation, having its principal
office at 00000 X. Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx
00000 (the "Employer"), and Xxxxxxx X Xxxxxx, residing at 00000 Xxxx Xxx,
Xxxx, Xxxxxxxx 00000 (the "Employee").
WITNESSETH:
WHEREAS, the Employer wishes to employ the Employee on the terms and
conditions contained in this Agreement, and
WHEREAS, the Employee is willing to accept such employment.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows.
SECTION 1. EMPLOYMENT
The Employer hereby employs the Employee and the Employee hereby
accepts such employment, on the terms and conditions set forth in this
Agreement.
SECTION 2. NATURE AND EXTENT OF DUTIES
2.1 NATURE OF DUTIES. The Employee is engaged as the Executive Vice
President Finance and Administration of the Employer (the "Executive Vice
President") and, in addition, the Employee shall perform such services
consistent with his position as shall be assigned to him from time to time by
the Employer
2.2 EXTENT OF DUTIES. During the term of his employment as
Executive Vice President, the Employee shall devote his full time and attention
to the service of the Employer and shall do all in his power to promote,
develop and extend the business of the Employer and its interests and welfare
and, except with the permission of the Board of Directors of the Employer,
shall not engage in any other business activity whatsoever during that time,
except that he may devote a portion of his time to personal or
2
philanthropic affairs and interests if these do not interfere with the
performance of his duties and obligations to the Employer under this Agreement.
Notwithstanding the foregoing, if the Employer shall give the Employee a notice
under Section 5.1 of its refusal to extend or renew this Agreement, the duties
of the Employee shall be reduced to allow him a reasonable amount of time
during business hours to pursue alternative employment opportunities.
SECTION 3. COMPENSATION
3.1 COMPENSATION. As full compensation for the services to be
rendered by the Employee as Executive Vice President under this Agreement, the
Employer shall pay to the Employee, and the Employee shall accept, an annual
salary of $180,000, payable in equal bi-weekly installments, plus the bonus
described in Section 3.2 and the fringe benefits described in Section 4. The
salary payable to the Employee under this Agreement shall be reviewed by the
Compensation Committee of the Board of Directors of the Employer annually and
the Employer may, in its sole discretion, increase such salary from time to
time, but in no event shall such salary be reduced, without the written consent
of the Employee.
3.2 BONUS. In addition to the salary provided in Section 3.1, the
Employer shall pay the Employee an annual bonus, in an amount determined by the
Compensation Committee of the Board of Directors up to a maximum amount equal
to 60% of the salary provided in Section 3.1.
3.3 COMPENSATION AFTER CHANGE IN CONTROL. If, after a Change in
Control (as defined in Section 5.3), the Employee does not terminate his
employment as Executive Vice President, he shall receive as full compensation
for the services to be rendered as Executive Vice President for the remainder
of the then current term of this Agreement (1) a salary not less than his
salary in effect immediately prior to the Change in Control; (2) an annual
bonus equal to the greater of his most recent annual bonus or the annual bonus
received immediately prior to his most recent annual bonus; and (3) the fringe
benefits provided in Section 4.
3.4 COMPENSATION AND BENEFITS ON AND AFTER TERMINATION.
Notwithstanding the limitations contained in Section 5.2, upon termination of
the employment of the Employee as Executive
2
3
Vice President for any reason other than Willful Misconduct (as defined in
Section 5.3), he shall receive payment of his compensation described in this
Section 3 (including salary, bonus and fringe benefits) accrued to the date of
such termination in addition to the compensation provided for in Section 5.2.3.
In addition, at any time during the five year period following any such
termination that the Employee shall not be a full time employee of another
employer, the Employer shall provide the Employee the health, sickness and
accident benefits provided in Section 4.2. The amount of the Employee's annual
bonus which shall be deemed to be accrued in the event of such termination
shall be the amount computed as if the Employee had remained employed for an
entire year, prorated to the date of termination. Upon termination of the
employment of the Employee for Willful Misconduct, he shall receive payment of
his compensation described in this Section 3 (but not including any bonus)
accrued to the date of such termination.
SECTION 4. FRINGE BENEFITS
4.1 VACATIONS. The Employee shall be entitled each year to a paid
vacation of not less than four weeks or such greater amount as shall be
determined in accordance with the policy of the Employer established from time
to time.
4.2 BENEFIT PLANS. The Employee shall be entitled to receive
health, sickness and accident benefits for himself and his family not less
favorable than those currently provided and under such retirement or other
plans or policies as the Employer shall provide from time to time.
4.3 DEATH BENEFITS AND LIFE INSURANCE. If the employment of the
Employee as Executive Vice President under Section 2 shall terminate because
of the death of the Employee, the Employer shall continue to pay the Employee's
then current salary to a beneficiary designated by the Employee for a period of
180 days after his death. The Employer may, in its discretion and at its
expense, obtain insurance upon the life of the Employee, the proceeds of which
shall be payable to the Employer. The Employee hereby consents to the issuance
of any such insurance.
4.4 DISABILITY. If the employment of the Employee as Executive Vice
President is terminated because of the Disability (as defined in Section 5.3)
of the Employee, he shall receive Disability benefits equal to two year's
salary plus the amount of the most recent annual bonus paid to
3
4
the Employee. Such benefits shall be paid in 24 equal monthly amounts at the
end of each month after such Disability commences.
4.5 EXPENSES. Upon presentation of appropriate documentation, the
Employer shall reimburse the Employee for travel, entertainment and other
expenses necessarily incurred by the Employee in connection with the performance
of his duties under this Agreement.
SECTION 5. TERM, TERMINATION AND BENEFITS PAYABLE UPON TERMINATION
5.1 TERM. Subject to the provisions for termination contained in Sections
5.2, the term of this Agreement shall begin upon the date of this Agreement and
shall end on December 31, 1999, provided that unless either party shall notify
the other in writing of such party's refusal to extend or renew this Agreement,
effective January 1, 1998 and the first day of January each year thereafter, the
term of this Agreement shall be extended and renewed automatically for one
additional year, so that the term of this Agreement upon such renewal shall
always be three years.
5.2 GROUNDS FOR TERMINATION. This Agreement shall continue in effect as
provided in Section 5.1 hereof, provided that: (a) the Employee's employment
as Executive Vice President shall automatically terminate upon the death,
resignation or retirement of the Employee; (b) the Employee's employment as
Executive Vice President may be terminated at the option of
the Employer because of the Disability (as defined in Section 5.3) or Willful
Misconduct (as defined in Section 5.3) of the Employee, (c) the Employee's
employment as Executive Vice President may be terminated at the option of the
Employer for such other cause (including without limitation a Change in
Control), or without cause, without breach of this Agreement; (d) if the
Employer shall make any material changes in the duties of the Employee without
his consent, or if the Employer shall relocate its principal office more than
30 miles from its current location, the Employee shall have the right, by
giving written notice to the Employer within 30 days after the occurrence of
either of such events, to terminate his employment as Executive Vice President;
and (e) upon consummation of a Change in Control (as defined in Section 5.3),
the Employee shall have the right, in his sole discretion, for a period of 12
months after such Change in Control shall have
4
5
occurred, to terminate his employment as Executive Vice President or continue
his employment as Executive Vice President for the remainder of the then
current term of this Agreement subject to the terms and conditions of this
Agreement (without prejudice to the right of the Employer to terminate his
employment as Executive Vice President pursuant to the foregoing clause (c)). No
termination of employment by the Employee pursuant to the foregoing clauses (d)
or (e) shall be deemed to be a resignation or retirement.
5.2.1 DEATH, RESIGNATION OR RETIREMENT. If the employment of the
Employee as Executive Vice President is automatically terminated under Section
5.2(a) because of the death, resignation or voluntary retirement of the
Employee, he, his beneficiaries, his estate or his personal representative shall
be entitled to receive: (1) in any of the foregoing events, the benefits, if
any, provided under the plans described in Section 4.2 or by law and the
accrued compensation described in Section 3.4; and (2) in the case of the death
of the Employee, the death benefits and life insurance described under Section
4.3. Except as provided in this Section 5.2.1. in any of such events; no
further payments shall be due or made and no further obligations of the
Employer shall exist under this Agreement,
5.2.2 DISABILITY OR WILLFUL MISCONDUCT. If the employment of the
Employee as Executive Vice President is terminated at the option of the
Employer under Section 5.2(b) because of the Disability or Willful Misconduct
of the Employee, he shall be entitled to receive: (1) in the case of Disability,
all of the benefits described under Sections 3 and 4 prior to the determination
of Disability and the disability benefits described under Section 4.4 after the
determination of Disability; and (2) in the case of Willful Misconduct, no
further payments shall be due or made and no further obligations of the
Employer shall exist under this Agreement.
5.2.3 BENEFITS PAYABLE FOR TERMINATION WITHOUT CAUSE, CHANGE IN
DUTIES OR OFFICE LOCATION, OR CHANGE IN CONTROL. If the employment of the
Employee as Executive Vice President is terminated by the Employer for any
cause or without cause under Section 5.2(c), or if the employment of the
Employee is terminated
5
6
by the Employee under Section 5.2(d) because of a change in his duties or the
location of the Employer's principal office or a Change in Control:
5.2.3.1 the Employee shall receive in a lump sum an amount equal to 2.50
times (1) his salary in effect immediately prior to such termination, plus (2)
a bonus equal to the greater of his most recent annual bonus or the
annual bonus received immediately prior to his most recent annual bonus;
5.2.3.2 the right of the Employee to exercise any outstanding options or
other rights to acquire any capital stock of the Employer, shall be accelerated
and become immediately exercisable; and
5.2.3.3 the right of the Employee to receive any compensation measured by
the price of any capital stock of the Employer, and any other rights to
compensation or benefits under this Agreement which are contingent upon the
continued employment of the Employee shall become immediately exercisable or
receivable by the Employee to the extent they would have become exercisable or
receivable by the Employee if he had remained employed by the Employer for the
balance of the then current term of this Agreement.
5.3 CERTAIN DEFINITIONS. For the purposes of this Agreement, the
following capitalized terms shall have the meanings given to them below:
5.3.1 "DISABILITY" shall mean the Employee's physical or mental
incapacity, for a cumulative period of 180 days in any consecutive 12 month
period during the term of this Agreement, to render the services to be performed
by him under this Agreement; provided however, that if, at the expiration of a
cumulative period of 90 days during which the Employee has been so physically or
mentally incapacitated, the certificate of a qualified physician of good
standing acceptable to both parties shall have been obtained by the Employer
certifying that in the opinion of such physician such physical or mental
incapacity is permanent, such incapacity also shall be deemed to be
"Disability".
6
7
5.3.2 A "CHANGE IN CONTROL" shall have occurred:
(1) if the Employer shall sell all or substantially all of its
assets to a third party;
(2) if the Employer shall merge or consolidate into or with another
corporation and the Employer shall not be the surviving corporation or persons
owning a majority of the voting securities of the Employer prior to such
transaction shall not continue to own a majority of the voting securities of
the corporation surviving such transaction; or
(3) if any "person" (as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and as modified in
Sections 13(d) and 14(d) of the Exchange Act), other than the Employer or any
of its subsidiaries, any employee benefit plan of the Employer or Xxx Xxxxxxxxx
or any of his affiliates (a "Person") becomes the "beneficial owner" (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Employer representing more than 20% of the outstanding shares
of common stock of the Employer and such Person's beneficial ownership level
then exceeds the percentage of the Employer's outstanding shares then owned by
Xxx Xxxxxxxxx and any of his affiliates.
5.3.3 "WILLFUL MISCONDUCT" shall mean the habitual neglect or
habitual failure by the Employee to perform his duties under this Agreement,
the dishonesty of the Employee in any material respect in connection with the
performance of his duties or if the Employee shall be convicted of a felony.
SECTION 6. CONFIDENTIAL INFORMATION
The Employee acknowledges that as an employee of the Employer he occupies a
position of trust and confidence and agrees that, during and after the term of
this Agreement, he will treat as confidential and will not, without written
authorization from the Employer, directly or indirectly disclose to any person,
firm, association or corporation or use for his own benefit or gain, any
information, plans, products, or customer or supplier lists, which are
confidential to the Employer, or any trade secrets or confidential material or
information of the Employer or any corporation or other entity controlled by,
controlling or under common control with the Employer (an
7
8
"Affiliate"). The Employee agrees to deliver or return to the Employer, upon
termination or expiration of the term of this Agreement or as soon thereafter
as possible, all confidential documents or confidential written information
prepared by the Employee or furnished to him by the Employer or any Affiliate
during the term of this Agreement.
SECTION 7. RESTRICTIVE COVENANT
The Employee agrees that, during any period in which he is employed as an
employee of or during any period in which he is receiving compensation from the
Employer under this Agreement and for a period of one year after the cessation
of such compensation, he shall not compete in any way anywhere in the world with
the Employer's business, including but not limited to acting as an agent,
employee, sole proprietor, partner, creditor, investor or consultant of, or
otherwise participating in, directly or indirectly, an enterprise, organization
or entity which is, or which becomes within any such period, competitive with
the business of the Employer. The ownership by the Employee of up to 1% of the
publicly traded debt or equity securities of a corporation shall not by itself
be deemed to be a violation of the foregoing prohibition.
SECTION 8. GENERAL PROVISIONS
8.1 EQUITABLE RELIEF. The Employee acknowledges and agrees that a breach
by him of the provisions of Section 6 or 7 will cause the Employer irreparable
injury and harm which cannot be compensated by money damages. The Employee,
therefore, expressly agrees that the Employer shall be entitled to injunctive
or other equitable relief to prevent a breach of any provision of Section 7 or
8 of this Agreement and to secure their enforcement in addition to any other
remedies which may be available to the Employer.
8.2 SEVERABILITY. In case any one or more of the provisions of this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained in
this Agreement shall not in any way be affected or impaired thereby.
8.3 GOVERNING LAW. This Agreement shall be construed under and governed
by the laws of the State of Michigan without giving effect to any conflicts of
laws rules.
8
9
8.1 ASSIGNMENT. This Agreement shall not be assignable, in whole or in
part, by either party, whether by operation of law or otherwise, unless such
assignment shall be consented to by the other party in writing.
8.5 NOTICES. Any notices or other communications required or permitted
under this Agreement shall sufficiently be given if sent by registered or
certified mail to the parties at their respective addresses listed in the
preambles of this Agreement, or other such address as shall be furnished in
writing by either party to the other. Any such notice or communication shall
be deemed to have been given as of the date so mailed.
8.6 AMENDMENT; ENTIRE AGREEMENT. This Agreement may not be amended,
modified or superseded except by an agreement in writing signed by both the
Employer and the Employee. This Agreement contains the entire agreement of
the parties with respect to its subject matter and supersedes any prior
negotiations, agreement or understanding between the parties with respect to
such subject matter.
8.7 SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
8.9 LEGAL EXPENSES. The Employer shall pay the reasonable legal expenses
of the Employee incurred in connection with any dispute under this Agreement.
9
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed with effect from the day and year first above written
COMPLETE BUSINESS SOLUTIONS, INC.
By
---------------------------------
Xxx X. Xxxxxxxxx, President
and Chief Executive Officer
EMPLOYEE
---------------------------------
Xxxxxxx X. Xxxxxx
10
