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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 19th day of
January 1998, by and between Personnel Group of America, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it to be in their respective
best interests to enter into an agreement providing for the Company's employment
of Executive pursuant to the terms herein stated;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, it is hereby agreed as follows:
1. Effective Date. This Agreement shall be effective as of the 19th day
of January 1998, which date shall be referred to herein as the "Effective
Date".
2. Position and Duties.
(a) The Company hereby employs Executive as its President of
Commercial Staffing Division commencing as of the Effective Date for the "Term
of Employment" (as herein defined below). In this capacity, Executive shall
devote his best efforts and his full business time and attention to the
performance of the services customarily incident to such offices and position
and to such other services of a senior executive nature as may be reasonably
requested by the Chairman and Chief Executive Officer of the Company which may
include services for one or more subsidiaries or affiliates of the Company.
Executive shall in his capacity as an employee and officer of the Company be
responsible to and obey the reasonable and lawful directives of the Chief
Executive Officer.
(b) Executive shall devote his full time and attention to such
duties, except for sick leave, reasonable vacations, and excused leaves of
absence as more particularly provided herein. Executive shall use his best
efforts during the Term of Employment to protect, encourage, and promote the
interests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay to Executive during the
Term of Employment a minimum salary at the rate of two hundred thousand dollars
($200,000) per calendar year and agrees that such salary shall be reviewed at
least annually. Such salary shall be subject to discretionary annual increases
as determined by the Board of Directors. Such salary shall be payable in
accordance with the Company's normal payroll procedures. (Executive's annual
salary, as set forth above or as it may be increased from time to time as set
forth herein, shall be referred to hereinafter as "Base Salary.") At no time
during the Term of
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Employment shall Executive's Base Salary be decreased from the amount of Base
Salary then in effect.
(b) Performance Bonus. In addition to the compensation
otherwise payable to Executive pursuant to this Agreement, Executive shall be
eligible to receive an annual bonus ("Bonus") pursuant to a performance bonus
plan (the "Bonus Plan") which shall be established by the Company for its senior
executive officers and which shall provide for bonus compensation to be payable
based upon the financial and other performance of the Company and its senior
executives.
4. Benefits. During the Term of Employment:
(a) Executive shall be eligible to participate in any life,
health and long-term disability insurance programs, pension and retirement
programs, stock option and other incentive compensation programs, and other
fringe benefit programs made available to senior executive employees of the
Company from time to time, and Executive shall be entitled to receive such other
fringe benefits as may be granted to his from time to time by the Company.
(b) Executive shall be allowed 28 days of paid time off (PTO)
per calendar year and leaves of absence with pay on the same basis as other
senior executive employees of the Company.
(c) The Company shall reimburse Executive for reasonable
business expenses incurred in performing Executive's duties and promoting the
business of the Company, including, but not limited to, reasonable entertainment
expenses, travel and lodging expenses, following presentation of documentation
in accordance with the Company's business expense reimbursement policies.
5. Term; Termination of Employment. As used herein, the phrase "Term of
Employment" shall mean the period commencing on the Effective Date and ending on
January 18, 1999; provided, however, that as of the expiration date of each of
(i) the initial Term of Employment and (ii) if applicable, any Renewal Period
(as defined below), the Term of Employment shall automatically be extended for a
one (1) year period (each a "Renewal Period") unless either the Company or
Executive provides six (6) months' notice to the contrary. Notwithstanding the
foregoing, the Term of Employment shall expire on the first to occur of the
following:
(a) Termination by the Company Without Cause or By Executive
With Good Reason. Notwithstanding anything to the contrary in this Agreement,
whether express or implied, the Company may, at any time, terminate Executive's
employment for any reason other than Cause (as defined below) by giving
Executive at least 60 days' prior written notice of the effective date of
termination. In the event Executive's employment hereunder is terminated by the
Company other than for Cause or by Executive for Good Reason (as defined below),
Executive shall be entitled to receive (y) his Base Salary as he would have
received
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such amounts during the period commencing on the effective date of such
termination and ending on the First Anniversary thereof (the "Salary
Continuation Period"), as if Executive were still employed hereunder during the
Salary Continuation Period; and (z) if it has not previously been paid to
Executive, any Bonus to which Executive had become entitled under the Bonus Plan
prior to the effective date of such termination. In addition, all of Executive's
stock options with respect to the Company's stock shall become immediately and
fully exercisable. During the Salary Continuation Period, Executive and his
spouse and dependents shall be entitled to continue to be covered by all group
medical, health and accident insurance or other such health care arrangements in
which Executive was a participant as of the date of such termination, at the
same coverage level and on the same terms and conditions which applied
immediately prior to the date of Executive's termination of employment, until
Executive obtains alternative comparable coverage under another group plan,
which coverage does not contain any pre-existing condition exclusions or
limitations; provided, however, that if, as the result of the termination of
Executive's employment, Executive and/or his otherwise eligible dependents or
beneficiaries shall become ineligible for benefits under any one or more of the
Company's benefit plans, the Company shall continue to provide Executive and his
eligible dependents or beneficiaries, through other means, with benefits at a
level at least equivalent to the level of benefits for which Executive and his
dependents and beneficiaries were eligible under such plans immediately prior to
the date of Executive's termination of employment. At the termination of the
benefits coverage under the preceding sentence, Executive and his spouse and
dependents shall be entitled to continuation coverage pursuant to Section 4980B
of the Internal Revenue Code of 1986, as amended, Sections 601-608 of the
Employee Retirement Income Security Act of 1974, as amended, and under any other
applicable law, to the extent required by such laws, as if Executive had
terminated employment with the Company on the date such benefits coverage
terminates.
For purposes of this Agreement, "Good Reason" shall mean, without the
express written consent of Executive, the occurrence of any of the following
events unless such events are fully corrected within 30 days following written
notification by Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
(i) a material breach by the Company of any material
provision of this Agreement, including, but not limited to,
the assignment to Executive of any duties inconsistent with
Executive's position in the Company or an adverse alteration
in the nature or status of Executive's responsibilities;
(ii) the Company's requiring the Executive to be
based anywhere other than the metropolitan area where he
currently works and resides; and
(iii) the occurrence of a "Change in Control" as
defined below.
For purposes of this Agreement a "Change in Control" shall mean an
event as a result of which: (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), is
or becomes the "beneficial owner" (as defined
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in Rule 13d-3 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total voting power of
the voting stock of the Company; (ii) the Company consolidates with, or merges
with or into another corporation or sells, assigns, conveys, transfers, leases
or otherwise disposes of all or substantially all of its assets to any person,
or any corporation consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which the outstanding voting stock
of the Company is changed into or exchanged for cash, securities or other
property, other than any such transaction where (A) the outstanding voting stock
of the Company is changed into or exchanged for (x) voting stock of the
surviving or transferee corporation or (y) cash, securities (whether or not
including voting stock) or other property, and (B) the holders of the voting
stock of the Company immediately prior to such transaction own, directly or
indirectly, not less than 50% of the voting power of the voting stock of the
surviving corporation immediately after such transaction; or (iii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of the Company (together with any new directors whose
election by such Board or whose nomination for election by the stockholders of
the Company was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of the Company then in office; or
(iv) the Company is liquidated or dissolved or adopts a plan of liquidation,
provided, however, that a Change in Control shall not include any going private
or leveraged buy-out transaction which is sponsored by Executive or in which
Executive acquires an equity interest materially in excess of his equity
interest in the Company immediately prior to such transaction (each of the
events described in (i), (ii), (iii) or (iv) above, as provided otherwise by the
preceding clause being referred to herein as a "Change in Control").
(b) Termination for Cause. The Company shall have the right to
terminate Executive's employment at any time for Cause by giving Executive
written notice of the effective date of termination (which effective date may,
except as otherwise provided below, be the date of such notice). If the Company
terminates Executive's employment for Cause, Executive shall be paid his unpaid
Base Salary through the date of termination and the amount of any unpaid Bonus
to which Executive had become entitled under the Bonus Plan prior to the
effective date of such termination and the Company shall have no further
obligation hereunder from and after the effective date of termination and the
Company shall have all other rights and remedies available under this or any
other agreement and at law or in equity.
For purposes of this Agreement only, Cause shall mean:
i) fraud, misappropriation, embezzlement, or other
act of material misconduct against the Company or any
of its affiliates;
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ii) substantial and willful failure to perform
specific and lawful directives of the Board, as
reasonably determined by the Board;
iii) willful and knowing violation of any rules or
regulations of any governmental or regulatory body,
which is materially injurious to the financial
condition of the Company; or
iv) conviction of or plea of guilty or nolo
contendere to a felony;
provided, however, that with regard to subparagraph (ii) above, Executive may
not be terminated for Cause unless and until the Company has given his
reasonable written notice of its intended actions and specifically describing
the alleged events, activities or omissions giving rise thereto and with respect
to those events, activities or omissions for which a cure is possible, a
reasonable opportunity to cure such breach; and provided further, however, that
for purposes of determining whether any such Cause is present, no act or failure
to act by Executive shall be considered "willful" if done or omitted to be done
by Executive in good faith and in the reasonable belief that such act or
omission was in the best interest of the Company and/or required by applicable
law.
(c) Termination on Account of Death. In the event of
Executive's death while in the employ of the Company, his employment hereunder
shall terminate on the date of his death and Executive shall be paid his unpaid
Base Salary through the date of termination and the amount of any unpaid Bonus
to which Executive had become entitled under the Bonus Plan prior to the
effective date of such termination. In addition, any other benefits payable on
behalf of Executive shall be determined under the Company's insurance and other
compensation and benefit plans and programs then in effect in accordance with
the terms of such programs.
(d) Voluntary Termination by Executive. In the event that
Executive's employment with the Company is voluntarily terminated by Executive
other than for Good Reason, Executive shall be paid his unpaid Base Salary
through the date of termination and the amount of any unpaid Bonus to which
Executive had become entitled under the Bonus Plan prior to the effective date
of such termination, and the Company shall have no further obligation hereunder
from and after the effective date of termination and the Company shall have all
other rights and remedies available under this Agreement or any other agreement
and at law or in equity. Executive shall give the Company at least 60 days'
advance written notice of his intention to terminate his employment hereunder.
(e) Termination on Account of Disability. To the extent not
prohibited by The Americans With Disabilities Act of 1990 or the North Carolina
Handicapped Persons Protection Act if, as a result of Executive's incapacity due
to physical or mental illness (as determined in good faith by a physician
acceptable to the Company and Executive), Executive shall have been absent from
the full-time performance of his duties with the Company for 120 consecutive
days during any twelve (12) month period or if a physician acceptable to the
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Company advises the Company that it is likely that Executive will be unable to
return to the full-time performance of his duties for 120 consecutive days
during the succeeding twelve (12) month period, his employment may be terminated
for "Disability." During any period that Executive fails to perform his
full-time duties with the Company as a result of incapacity due to physical or
mental illness, he shall continue to receive his Base Salary, Bonus and other
benefits provided hereunder, together with all compensation payable to his under
the Company's disability plan or program or other similar plan during such
period, until Executive's employment hereunder is terminated pursuant to this
Section 5(e). Thereafter, Executive's benefits shall be determined under the
Company's retirement, insurance, and other compensation and benefit plans and
programs then in effect, in accordance with the terms of such programs.
6. Confidential Information, Non-Solicitation and Non-Competition.
(a) During the Term of Employment and for two (2) years
thereafter, Executive shall not, except as may be required to perform his duties
hereunder or as required by applicable law, disclose to others or use, whether
directly or indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the Company, its
subsidiaries and affiliates, and their respective clients and customers that is
not available to the general public and that was learned by Executive in the
course of his employment by the Company, including (without limitation) any
proprietary knowledge, trade secrets, data, formulae, information, and client
and customer lists and all papers, resumes, records (including computer records)
and the documents containing such Confidential Information. Executive
acknowledges that such Confidential Information is specialized, unique in nature
and of great value to the Company, and that such information gives the Company a
competitive advantage. Upon the termination of his employment for any reason
whatsoever, Executive shall promptly deliver to the Company all documents,
computer tapes and disks (and all copies thereof) containing any Confidential
Information.
(b) During the Term of Employment and for two (2) years
thereafter, Executive shall not, directly or indirectly in any manner or
capacity (e.g., as an advisor, principal, agent, partner, officer, director,
shareholder, employee, member of any association or otherwise) engage in, work
for, consult, provide advice or assistance or otherwise participate in any
activity which is competitive with the business of the Company, in any
geographic area in which the Company is now or shall then be doing business,
including without limitation, those geographic areas set forth on Exhibit A
hereto. Executive further agrees that during such period he will not assist or
encourage any other person in carrying out any activity that would be prohibited
by the foregoing provisions of this Section 6 if such activity were carried out
by Executive and, in particular, Executive agrees that he will not induce any
employee of the Company to carry out any such activity; provided, however, that
the "beneficial ownership" by Executive, either individually or as a member of a
"group," as such terms are used in Rule 13d of the General Rules and Regulations
under the Exchange Act, of not more than five percent (5%) of the voting stock
of any publicly held corporation shall not be a violation of this Agreement. It
is further expressly agreed that the Company will or
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would suffer irreparable injury if Executive were to compete with the Company or
any subsidiary or affiliate of the Company in violation of this Agreement and
that the Company would by reason of such competition be entitled to injunctive
relief in a court of appropriate jurisdiction, and Executive further consents
and stipulates to the entry of such injunctive relief in such a court
prohibiting Executive from competing with the Company or any subsidiary or
affiliate of the Company in violation of this Agreement.
(c) During the Term of Employment and for two (2) years
thereafter, Executive shall not, directly or indirectly, influence or attempt to
influence customers or suppliers of the Company or any of its subsidiaries or
affiliates, to divert their business to any competitor of the Company.
(d) Executive recognizes that he will possess confidential
information about other employees of the Company relating to their education,
experience, skills, abilities, compensation and benefits, and interpersonal
relationships with customers of the Company. Executive recognizes that the
information he will possess about these other employees is not generally known,
is of substantial value to the Company in developing its business and in
securing and retaining customers, and will be acquired by his because of his
business position with the Company. Executive agrees that, during the Term of
Employment, and for a period of two (2) years thereafter, he will not, directly
or indirectly, solicit or recruit any employee of the Company for the purpose of
being employed by his or by any competitor of the Company on whose behalf he is
acting as an agent, representative or employee and that he will not convey any
such confidential information or trade secrets about other employees of the
Company to any other person.
(e) If it is determined by a court of competent jurisdiction
in any state that any restriction in this Section 6 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.
(f) Executive acknowledges that he was informed of the time,
territory, scope and other essential requirements of the restrictions in this
Section 6 when he agreed to become employed with the Company under the terms set
forth in this Agreement, and Executive further acknowledges that he has received
sufficient and valuable consideration for his agreement to such restrictions.
7. No Offset - No Mitigation. Executive shall not be required to
mitigate damages under this Agreement by seeking other comparable employment.
The amount of any payment or benefit provided for in this Agreement, including
welfare benefits, shall not be reduced by any compensation or benefits earned by
or provided to him as the result of employment by another employer, except as
provided otherwise in Section 5(a) with respect to health and insurance benefits
provided during the Salary Continuation Period.
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8. Designated Beneficiary. In the event of the death of Executive while
in the employ of the Company, or at any time thereafter during which amounts
remain payable to Executive under Section 5, such payments (other than the right
to continuation of welfare benefits) shall thereafter be made to such person or
persons as Executive may specifically designate (successively or contingently)
to receive payments under this Agreement following Executive's death by filing a
written beneficiary designation with the Company during Executive's lifetime.
Such beneficiary designation shall be in such form as may be prescribed by the
Company and may be amended from time to time or may be revoked by Executive
pursuant to written instruments filed with the Company during his lifetime.
Beneficiaries designated by Executive may be any natural or legal person or
persons, including a fiduciary, such as a trustee or a trust or the legal
representative of an estate. Unless otherwise provided by the beneficiary
designation filed by Executive, if all of the persons so designated die before
Executive on the occurrence of a contingency not contemplated in such
beneficiary designation, then the amounts payable under this Agreement shall be
paid to Executive's estate.
9. Taxes. All payments to be made to Executive under this Agreement
will be subject to any applicable withholding of federal, state and local income
and employment taxes.
10. Miscellaneous. This Agreement shall also be subject to the
following miscellaneous considerations:
(a) Executive and the Company each represent and warrant to
the other that he or it has the authorization, power and right to deliver,
execute, and fully perform his or its obligations under this Agreement in
accordance with its terms.
(b) This Agreement contains a complete statement of all the
arrangements between the parties with respect to Executive's employment by the
Company; this Agreement supersedes all prior and existing negotiations and
agreements between the parties concerning Executive's employment; and this
Agreement can only be changed or modified pursuant to a written instrument duly
executed by each of the parties hereto.
(c) If any provision of this Agreement or any portion thereof
is declared invalid, illegal, or incapable of being enforced by any court of
competent jurisdiction, the remainder of such provisions and all of the
remaining provisions of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of North Carolina, except to the
extent governed by federal law.
(e) The Company may assign this Agreement to any direct or
indirect subsidiary or parent of the Company or joint venture in which the
Company has an interest, or any successor (whether by merger, consolidation,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company and this Agreement shall be binding upon
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and inure to the benefit of such successors and assigns. Except as expressly
provided herein, Executive may not sell, transfer, assign, or pledge any of his
rights or interests pursuant to this Agreement.
(f) Any rights of Executive hereunder shall be in addition to
any rights Executive may otherwise have under benefit plans, agreements, or
arrangements of the Company to which he is a party or in which he is a
participant, including, but not limited to, any Company-sponsored employee
benefit plans. Provisions of this Agreement shall not in any way abrogate
Executive's rights under such other plans, agreements, or arrangements.
(g) For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the named Executive at the address set forth below under his
signature; provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Chief Executive Officer of the
Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.
(h) Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
(i) Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
(j) This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
11. Resolution of Disputes. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in the City of Charlotte, North
Carolina in accordance with the rules of the American Arbitration Association
then in effect. The Company and Executive hereby agree that the arbitrator will
not have the authority to award punitive damages, damages for emotional distress
or any other damages that are not contractual in nature. Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided, however,
that the Company shall be entitled to seek a restraining order or injunction in
any court of competent jurisdiction to prevent any continuation of any violation
of the provisions of Section 6, and Executive consents that such restraining
order or injunction may be granted without the neces-
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sity of the Company's posting any bond except to the extent otherwise required
by applicable law. The expense of such arbitration shall be borne by the
Company.
12. Attorneys' Fees. Should either party hereto or their successors
retain counsel for the purpose of enforcing, or preventing the breach of, any
provision hereof, including, but not limited to, by instituting any action or
proceeding in arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a declaration of such
party's rights or obligations under the Agreement, or for any other remedy,
whether in arbitration or in a court of law, then the successful party shall be
entitled to be reimbursed by the other party for all costs and expenses incurred
thereby, including, but not limited to, reasonable fees and expenses of
attorneys and expert witnesses, including costs of appeal. If such successful
party shall recover judgment in any such action or proceeding, such costs,
expenses and fees may be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his costs of
suit, whether or not the suit proceeds to final judgment. If no costs are
awarded, the successful party shall be determined by the arbitrator or court, as
the case may be.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EXECUTIVE COMPANY
XXXXXXX X. XXXXXX PERSONNEL GROUP OF AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- ----------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President, Commercial Title: Chairman and CEO
Staffing Division
Address:
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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