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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 25th day of January, 1999, by and between Xxxx
Xxxxxxxx, residing at 0000 Xxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000 (hereinafter
referred to as the "Employee") and DIGITAL SOLUTIONS, INC., a New Jersey
corporation with principal offices located at 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000 (hereinafter referred to as the "Company").
W I T N E S S E T H :
WHEREAS, the Company and its subsidiaries are engaged in the business
of providing Human Resource Administrative Services; and
WHEREAS, the Company desires to employ the Employee for the purpose of
securing for the Company the experience, ability and services of the Employee;
and
WHEREAS, the Employee desires to be employed with the Company, pursuant
to the terms and conditions herein set forth, superseding all prior agreements
between the Company, its subsidiaries and/or predecessors and Employee;
NOW, THEREFORE, it is mutually agreed by and between the parties hereto
as follows:
ARTICLE I
EMPLOYMENT
Subject to and upon the terms and conditions of this Agreement, the
Company hereby employs and agrees to continue the employment of the Employee,
and the Employee hereby accepts such continued employment in his capacity as
President of the Company's Professional Employer Organization ("PEO").
ARTICLE II
DUTIES
1. The Employee shall, during the term of his employment with the
Company, and subject to the direction and control of the Company's CEO, perform
such duties and functions as he may be called upon to perform by the Company's
CEO during the term of this Agreement.
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2. The Employee agrees to devote full business time and his best
efforts in the performance of his duties for the Company and any subsidiary
corporation of the Company.
3. The Employee shall perform, in conjunction with the Company's
Executive Management, to the best of his ability the following services and
duties for the Company and its subsidiary corporations (by way of example, and
not by way of limitation):
a. Those duties attendant to the position with the Company for which he
is hired;
b. Establish and implement current and long range objectives, plans,
and policies, subject to the approval of the CEO and Board of Directors;
c. Financial planning for the PEO Division;
d. Managerial oversight of the Company's PEO business;
e. Ensure that all Company's PEO activities and operations are carried
out in compliance with local, state and federal regulations and laws governing
business operations;
f. Work with the CEO on business expansion of the PEO Company,
including acquisitions, joint ventures, and other opportunities; and
g. Promotion of the relationships of the Company and its subsidiaries
with their respective employees, customers, suppliers and others in the business
community.
h. Employee shall be based in the Pinellas and Hillsborough, Florida
counties area and shall undertake such travel, within or outside the United
States, as is or may be reasonably necessary in the interests of the Company.
ARTICLE III
COMPENSATION
1. Commencing the date hereof and during the term hereof, Employee
shall be compensated initially at the rate of $175,000 per annum, subject to
such increases to be determined on each 12-month anniversary during the term of
this Agreement (the "Base Salary"), which shall be paid to Employee as in
accordance with the Company's regular payroll periods.
2. Employee shall be entitled to receive a bonus (the "Bonus") in
accordance with the Company's Senior Management Incentive Program to be
determined within 30 days of commencement of this Agreement and thereafter
within 30 days of the beginning of each fiscal
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year.
3. The Company shall deduct from Employee's compensation all federal,
state, and local taxes which it may now or may hereafter be required to deduct.
ARTICLE IV
BENEFITS
1. During the term hereof, the Company shall provide Employee with
group health care and insurance benefits as generally made available to the
Company's senior management; provide such other insurance benefits obtained by
the Company and made generally available to the Company's senior management (the
Company will reimburse the Employee to the extent his health and welfare
benefits are reduced from those in effect at the TeamStaff Companies at the time
of the acquisition by the Company); reimburse the Employee, upon presentation of
appropriate vouchers, for all reasonable business expenses incurred by the
Employee on behalf of the Company upon presentation of suitable documentation;
and pay to Employee the sum of $800 per month as and for an automobile
allowance.
2. In the event the Company wishes to obtain Key Man life insurance on
the life of Employee, Employee agrees to cooperate with the Company in
completing any applications necessary to obtain such insurance and promptly
submit to such physical examinations and furnish such information as any
proposed insurance carrier may request.
3. For each year of the term hereof, Employee shall be initially
entitled to five (5) weeks paid vacation.
ARTICLE V
NON-DISCLOSURE
The Employee shall not, at any time during or after the termination of
his employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company's business, finances,
marketing, computerized payroll, accounting and information business, personnel
and/or employee leasing business of the Company and its subsidiaries, including
information relating to any customer of the
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Company or pool of temporary employees, or any other nonpublic business
information of the Company and/or its subsidiaries learned as a consequence of
Employee's employment with the Company (collectively referred to as the
"Proprietary Information"). For the purposes of this Agreement, trade secrets
and confidential information shall mean information disclosed to the Employee or
known by him as a consequence of his employment by the Company, whether or not
pursuant to this Agreement, and not generally known in the industry. The
Employee acknowledges that trade secrets and other items of confidential
information, as they may exist from time to time, are valuable and unique assets
of the Company, and that disclosure of any such information would cause
substantial injury to the Company.
ARTICLE VI
RESTRICTIVE COVENANT
1. In the event of the voluntary termination of employment with the
Company prior to the expiration of the term hereof, or Employee's discharge in
accordance with Article VIII, or the expiration of the term hereof without
renewal, Employee agrees that he will not, for a period of two (2) years
following such termination (or expiration, as the case may be) directly or
indirectly enter into or become associated with or engage in any other business
(whether as a partner, officer, director, shareholder, employee, consultant, or
otherwise), which business is located in the States of Florida, New Jersey, New
York, and Texas or any other state the Company is operating in and is involved
in the professional employer organization business, or is otherwise engaged in
the same or similar business as the Company shall be engaged and is in direct
competition with the Company, or which the Company is in the process of
developing, during the tenure of Employee's employment by the Company.
Notwithstanding the foregoing, the ownership by Employee of less than 5 percent
of the shares of any publicly held corporation shall not violate the provisions
of this Article VI.
2. In furtherance of the foregoing, Employee shall not during the
aforesaid period of non-competition, directly or indirectly, in connection with
any computerized payroll, employee leasing, or permanent or temporary personnel
business, or any business similar to the business in which the Company was
engaged, or in the process of developing during Employee's tenure with
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the Company, solicit any customer or employee of the Company who was a customer
or employee of the Company during the tenure of his employment.
3. If any court shall hold that the duration of non-competition or any
other restriction contained in this Article is unenforceable, it is our
intention that same shall not thereby be terminated but shall be deemed amended
to delete therefrom such provision or portion adjudicated to be invalid or
unenforceable or, in the alternative, such judicially substituted term may be
substituted therefor.
ARTICLE VII
TERM
1. This Agreement shall be for a term of two (2) years commencing
January 1, 1999 and terminating on December 31, 2000 unless sooner terminated as
provided for herein (the "Expiration Date").
2. Unless this Agreement is earlier terminated pursuant to the terms
hereof, the Company agrees to notify Employee in writing whether it intends to
negotiate a renewal of this Agreement by notice six (6) months prior to the
Expiration Date. In the event the Company fails to so notify the Employee, the
term of this Agreement shall be extended for an additional one (1) year.
ARTICLE VIII
DISABILITY DURING TERM
In the event Employee becomes totally disabled so that he is unable or
prevented from performing any one or all of his usual duties hereunder for a
period of four (4) consecutive months, and the Company elects to terminate this
agreement in accordance with Article IX, paragraph (B) then, and in that event,
Employee shall receive his Base Salary as provided under Article III of this
Agreement for a period of twelve (12) months commencing from the date of such
total disability. The obligation of the Company to make the aforesaid payments
shall be modified and reduced and the Company shall receive a credit for all
disability insurance payments which Employee may receive from insurance policies
provided by the Company.
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ARTICLE IX
TERMINATION
The Company may terminate this Agreement:
a. Upon the death of Employee during the term hereof, except that the
Employee's legal representatives, successors, assigns, and heirs shall have
those rights and interests as otherwise provided in this Agreement, including
the right to receive accrued but unpaid incentive compensation and special bonus
compensation on a pro rata basis.
b. Subject to the terms of Article VIII, upon written notice from the
Company to the Employee, if Employee becomes totally disabled and as a result of
such total disability, has been prevented from and unable to perform all of his
duties hereunder for a consecutive period of four (4) months.
c. Upon written notice from the Company to the Employee, at any time
for "Cause." For purposes of this Agreement, "Cause" shall be defined as:
willful disobedience by the Employee of a material and lawful instruction of the
CEO or the Board of Directors of the Company; conviction of the Employee of any
misdemeanor involving fraud or embezzlement or similar crime, or any felony,
excluding traffic-related offenses; breach by the Employee of any material
provision of this Agreement; or conduct amounting to fraud, dishonesty,
negligence, willful misconduct, recurring insubordination, inattention to or
unsatisfactory performance of duties which adversely affects operations of the
Company, or excessive absences from work, provided that the Company shall not
have the right to terminate the employment of Employee pursuant to the foregoing
clauses (a) and (b) above unless written notice specifying such breach shall
have been given to the Employee and, in the case of breach which is capable of
being cured, the Employee shall have failed to cure such breach within thirty
(30) days after his receipt of such notice.
d. In the event the Company demotes, substantially reduces the duties
of or reduces the salary or benefits of the employee, the employee may elect to
treat this Agreement as terminated for "good reason." In the event of
termination of this Agreement for good reason, the employee shall be entitled to
payment of the greater of all salary, benefits and stock grants or options due
for the remaining term of the Agreement or the severance payments as defined in
Article VII(c) herein, in
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addition to any rights or remedies available to the employee at law or in
equity.
e. In the event of the termination of this Agreement and the discharge
of Employee by the Company in breach and violation of this Agreement, Employee
shall not be obligated to mitigate damages by seeking or obtaining alternate
employment.
ARTICLE X
TERMINATION OF PRIOR AGREEMENTS
This Agreement sets forth the entire agreement between the parties and
supersedes all prior agreements between the parties, whether oral or written
prior to the effective date of this Agreement.
ARTICLE XI
STOCK OPTIONS
As an inducement to Employee to enter into this Agreement the Company
hereby grants to Employee options to purchase shares of the Company's Common
Stock, $.001 par value, upon and subject to the following conditions:
(a) Subject to the terms and conditions of the Company's
Senior Management Incentive Plan (the "Plan"), and the terms and conditions set
forth in the Stock Option Certificate which are incorporated herein by
reference, the Employee is hereby granted options to purchase 100,000 shares of
the Company's Common Stock of which options to purchase 50,000 shares shall be
vested on the second anniversary hereof. The option shall contain such other
terms and conditions as set forth in the stock option agreement. The exercise
price of the options shall be the closing market price of the Common Stock on
the date hereof. The foregoing options shall be qualified as incentive stock
options to the maximum as allowed by law. The Options provided for herein are
not transferable by Employee and shall be exercised only by Employee, or by his
legal representative or executor, as provided in the Plan. Such Option shall
terminate as provided in the Plan.
ARTICLE XII
ARBITRATION AND INDEMNIFICATION
Any dispute arising out of the interpretation, application, and/or
performance of this Agreement with the sole exception of any claim, breach, or
violation arising under Articles V or VI
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hereof shall be settled through final and binding arbitration before a single
arbitrator in the State of Florida in accordance with the Rules of the American
Arbitration Association. The arbitrator shall be selected by the Association and
shall be an attorney-at-law experienced in the field of corporate law. Any
judgment upon any arbitration award may be entered in any court, federal or
state, having competent jurisdiction of the parties.
The Company hereby agrees to indemnify, defend, and hold harmless the
Employee for any and all claims arising from or related to his employment by the
Company at any time asserted, at any place asserted, and to the fullest extent
permitted by law. The Company shall maintain such insurance as is necessary and
reasonable to protect the Employee from any and all claims arising from or in
connection with his employment by the Company, provided such insurance can be
obtained without unreasonable effort and expense.
ARTICLE XIII
SEVERABILITY
If any provision of this Agreement shall be held invalid and
unenforceable, the remainder of this Agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.
ARTICLE XIV
NOTICE
All notices required to be given under the terms of this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered to the addressee in person, with written acknowledgment received, or
mailed by certified mail, return receipt requested, as follows:
IF TO THE COMPANY: Digital Solutions, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
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IF TO THE EMPLOYEE: Xxxx Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph. Notice shall be effective
three (3) days after delivery or mailing.
ARTICLE XV
BENEFIT
This Agreement shall inure to, and shall be binding upon, the parties
hereto, the successors and assigns of the Company, and the heirs and personal
representatives of the Employee.
ARTICLE XVI
WAIVER
The waiver by either party of any breach or violation of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.
ARTICLE XVII
GOVERNING LAW
This Agreement has been negotiated and executed in the State of Florida
shall govern its construction and validity.
ARTICLE XVIII
JURISDICTION
Any or all actions or proceedings which may be brought by the Company
or Employee under this Agreement shall be brought in courts having a situs
within the State of Florida, and Employee and the Company each hereby consent to
the jurisdiction of any local, state, or federal court located within the State
of Florida.
ARTICLE XIX
ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
hereto. No change, addition, or amendment shall be made hereto, except by
written agreement signed by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals the day and year first above written.
(Corporate Seal) DIGITAL SOLUTIONS, INC.
By:________________________________
Xxxxxx X. Xxxxxxx
President & CEO
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Xxxx Xxxxxxxx
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