EXHIBIT 10.6
FORM OF
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
July 1, 1998, (the "Effective Date"), by and between Xxxxxxxx X. Xxxxxx, an
individual residing at 000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 ("Executive"),
and Strategix Solutions, Inc., a Delaware corporation ("Employer").
In consideration of the mutual promises, agreements and covenants, and
subject to the terms contained in this Agreement, the Employer and the
Executive, intending to be legally bound, hereby agree as follows:
1. Employment. Employer hereby agrees to employ Executive as Chief
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Executive Officer of Employer, and the Executive hereby accepts such employment
by Employer, in accordance with and subject to the terms and conditions of this
Agreement. For as long as AccuStaff Incorporated ("AccuStaff") owns the majority
of the common stock of Employer, Employee shall report directly to the Chairman
of the Board of Strategix, subject to the ultimate direction of the Board of
Directors. If AccuStaff sells or spins-off the majority of Employer's stock,
Executive shall then report directly to Employer's Board of Directors (the
"Board"). Executive shall devote substantially all of his business time and best
efforts to rendering services on behalf of Employer.
2. Term, Employment Period. The term of Executive's employment hereunder
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shall begin on the Effective Date and shall terminate on June 30, 2001, unless
otherwise renewed or terminated as provided herein. For purposes of this
Agreement, the period beginning on the Effective Date and ending on the Date of
Termination (as defined in paragraph 8.F. below) shall be referred to herein as
the "Employment Period."
3. Compensation. During the Employment Period, the Executive will receive
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the following compensation:
A. Base Salary. A base annual salary of $350,000.00 (the "Base Salary"),
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payable in accordance with the Employer's standard practice for other comparable
executives.
B. Incentive Compensation. Additional compensation (the "Incentive
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Compensation") shall be equal to 2% of the growth (increase) in net income
(before taxes) of the Employer for each fiscal year (or part thereof) of the
Employer during the Employment Period, plus 1% of the increase in net income
(before taxes) over a base amount of $70,000,000.00. Net income shall be
determined in accordance with generally accepted accounting principles
consistently applied as determined by the Employer's independent auditors, whose
determination of net income shall be final and binding upon the Executive and
the Employer. The Incentive Compensation payment shall be made on March 31 of
the year following the fiscal year for which the growth in net income is being
calculated. For any fiscal year of the Employer in which the Effective Date
occurs in the middle of the fiscal year or the Date of Termination occurs prior
to the end of the fiscal year, the Incentive Compensation shall be calculated
based on the growth in net income during the year in which the Effective Date or
Date of Termination occurs, divided by twelve (12), multiplied by the number of
months or part thereof from the beginning of such fiscal year to the Date of
Termination or from the Effective Date to the end of such fiscal year, whichever
is applicable. Nothing herein shall be construed as requiring the Employer to
extend this Agreement or the Executive to make any payment to the Employer in
the event of a decrease in net income.
C. In no event shall Employee's Total Compensation exceed $1,000,000
per annum, such limitation to be reviewed annually by the Compensation Committee
of the Board of Directors.
D. Employee's Base Salary and Incentive Compensation shall be reviewed
annually by the Compensation Committee and the Board, and increased, if
appropriate to reflect performance.
4. Stock Options. On or about the Effective Date, Employer shall grant to
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the Executive 500,000 non-incentive stock options (the "Options") under the
Strategix 1998 Omnibus Incentive Plan. The Options shall have an exercise price
equal to the price offered at the initial public offering of the stock. The
Options shall be exercisable 33.33% per year beginning one (1) year from the
Effective Date, but in no event prior to the Spin-off by AccuStaff Incorporated
of Employer. In the event of a Change in Control, as defined in Section 7.C. of
this Agreement, or any termination without Cause, all unvested options shall
vest.
5. Benefits. During the Term of this Agreement, the Employer shall
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provide the Executive with all retirement, welfare, deferred compensation,
disability, life insurance and other benefits generally provided to all of the
Employer's other senior executive officers. The Executive shall receive twenty
(20) days of paid vacation per year. The Employer shall reimburse the Executive
for all reasonable and necessary expenses incurred while conducting the
Employer's business in accordance with policies adopted by the Employer from
time to time. The Executive acknowledges that pursuant to the Internal Revenue
Code of 1986, as amended, and the regulations promulgated thereunder, the
Employer may be required to report for tax purposes all or a portion of certain
of the benefits and reimbursements provided in this Agreement as income in
respect of the Executive. Unless Executive is terminated for "cause" as defined
in Section 7.B. below, Employer shall provide Executive with post-termination
coverage under its health insurance plan or a comparable plan until he reaches
age sixty-five (65) as long as he meets the eligibility requirements thereof.
6. Non-Competition; Non-Solicitation, Non-Disclosure. In consideration of
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the employment of the Executive by the Employer, the Executive agrees as
follows:
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A. Non-Competition. During the Employment Period and for a period of two
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(2) years after the Date of Termination, the Executive will not, directly or
indirectly, own, manage, be employed by, work for, consult for, be an officer or
director of, advise, represent, engage in or carry on any business anywhere in
the United States which competes with the business of the Employer as it exists
at that time, including temporary staffing, direct-hire staffing, and
outsourcing.
B. Non-Solicitation. During the Employment Period and for a period of two
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(2) years after the Date of Termination, the Executive will not solicit or
accept any staffing, consulting or outsourcing business from any of the clients
of Employer. During this period, Executive shall not hire, recruit or attempt
to recruit, for any business which competes with Employer, any person employed
or contracted with Employer or employed or contracted with Employer at any time
during the previous twelve (12) months.
C. Non-Disclosure of Information. The Executive will not at any time,
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during or after the term of this Agreement in any fashion, form, or manner,
either directly or indirectly, divulge, disclose, or communicate to any person,
firm, or corporation, in any manner whatsoever, any confidential, proprietary,
or trade secret information of any kind, nature, or description concerning any
matters affecting or relating to the business of the Employer, including, but
not limited to, matters of a technical nature, such as "know how," secret
processes, inventions, computer software, product sources, and matters of a
business nature, such as its client lists, client contact information,
consultant or contractor information, on-site program(s) and support materials,
candidate and recruit lists and information, placement information, pricing
lists, contracts, sales reports, sales, financial and marketing data, systems,
forms, methods, procedures, and analyses, and any other proprietary information,
whether communicated orally or in documentary or other tangible form, concerning
how Employer operates its business. The parties to this Agreement recognize
that Employer has invested considerable amount of time and money in attaining
and developing all of the information described above, and any unauthorized
disclosure or release of such Confidential Information in any form would
irreparably harm Employer.
7. Termination of Employment.
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A. Death or Disability. The Executive's employment shall terminate
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automatically upon the Executive's death during the Employment Period.
Additionally, if the Employer determines in good faith that a Total Disability
of the Executive has occurred, it may give the Executive written notice of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Employer shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date") if, within the thirty (30) days after such receipt, the Executive shall
not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Total Disability" shall mean the physical or mental
condition rendering the Executive unable, for a total of six (6) months during
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any twelve (12) month period, to perform the duties and bear the
responsibilities referred to in paragraph No. 2 herein which is determined to be
total and permanent by a physician selected by the Employer or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
B. Cause. The Employer may terminate the Executive's employment during
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the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean (i) a material breach by the Executive of the Executive's obligations under
paragraph 1 above (other than as a result of temporary incapacity due to
physical or mental illness, or Disability) which is willful and deliberate on
the Executive's part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Employer, and which is
not remedied in a reasonable period of time (to be not less than fifteen (15)
days) after receipt of written notice from the Employer specifying such breach;
(ii) the conviction of the Executive for a felony; or (iii) a breach of the
Executive's fiduciary duty to the Employer or willful violation in the course of
performing his duties for the Employer of any law, rule or regulation (other
than traffic violation or other minor offenses). No act or failure to act on
the Executive's part shall be considered willful unless done or omitted to be
done in bad faith and without reasonable belief that the action or omission was
in the best interest of the Employer.
C. A Change in Control. For the purposes of this Agreement, "Change in
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Control" shall mean:
(i) an acquisition of any voting securities of the Employer by
any "Person" (as the term person is used for purposes of Section 3(d)
or 14(d) of the Securities Exchange Act of 1934 (the "1934 Act")),
immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-d promulgated under the 0000 Xxx) of 25% or
more of either (a) the then outstanding shares of common stock of the
Employer, or (b) the combined voting power of the then outstanding
voting securities of the Employer entitled to vote generally in the
election of directors;
(ii) individuals who, as of the Effective Date, constitute the
Board of Directors of Employer cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose election,
or nomination for election by the Employer's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Board of Directors shall be considered as though such
individual were a member of the Board of Directors of Employer as of
the Effective Date;
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(iii) approval by the shareholders of Employer of a
reorganization, merger, or consolidation, in each case unless the
shareholders of Employer immediately before such reorganization,
merger, or consolidation own, directly or indirectly, immediately
following such reorganization, merger, or consolidation at least a
majority of the combined voting power of the outstanding voting
securities of the corporation resulting from such reorganization,
merger, or consolidation in substantially the same proportion as their
ownership of the voting securities immediately before such
reorganization, merger, or consolidation; or
(iv) approval by the shareholders of Employer of (a) a complete
liquidation or dissolution of the Employer, or (b) the sale or other
disposition of all or substantially all of the assets of the Employer.
D. Without Cause. Either the Employer or the Executive may terminate this
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Agreement without Cause or reason upon not less than thirty (30) days written
notice to the other, setting forth the effective date of termination. Any
termination of Employee's employment within one (1) year following a Change of
Control shall be deemed to be a termination without Cause.
E. Notice of Termination. Any termination by the Employer for Cause shall
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be communicated to the other party by Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" means (i) a written notice which
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment, and (iii) specifies the Date of Termination. The failure by the
Employer to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Cause shall not waive any right of the
Executive or the Employer hereunder or preclude the Executive or the Employer
from asserting such fact or circumstance in enforcing the Executive's or the
Employer's rights hereunder.
F. Date of Termination. "Date of Termination" means (i) the end of the
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term of the Agreement specified in paragraph 2 (as such term may be extended
from time-to-time by written agreement of both parties) if Employer has given
any combination of a total of twelve (12) months of notice or severance pay
(such pay to consist of the applicable pro-rated Base Salary and Incentive
Compensation plus the payment of Employee's health insurance premium under COBRA
for any severance period beyond Employee's actual employment); (ii) if the
Executive's employment is terminated by the Employer for Cause, the date
specified in the Notice of Termination as the Date of Termination; (iii) if the
Executive's employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date,
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as the case may be; and (iv) if the Executive's employment is terminated by
either party other than for death, Disability or Cause, the date set forth in
the notice required under subparagraph D. above as the Date of Termination is to
be effective.
8. Obligations of the Employer upon Termination. Upon the termination of
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the Executive's employment for any reason, the Executive shall be entitled to
Base Salary and all benefits (including accrued vacation) through the Date of
Termination. Upon the termination of the Executive's employment following a
Change of Control within one (1) year, or other than by (a) the expiration of
the Employment Period (or any extension of such term) or (b) the Employer with
Cause, the Executive shall in addition be entitled to receive (i) a lump sum
payment equal to the present value of the Executive's annual Base Salary as of
the Date of Termination and (ii) a lump sum payment of the present value of the
pro rata Incentive Compensation payment as determined through the Date of
Termination. For purposes of this Agreement, "present value" shall be
determined by using the "Applicable Federal Rate" for the period corresponding
with that period over which the present value is being determined. The lump sum
payment shall be paid no later than thirty (30) days after the Date of
Termination in immediately available United States funds.
9. Mitigation of Damages. The Executive shall not be required to mitigate
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damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by the
Executive as the result of self-employment or employment by another employer or
otherwise.
10. Mandatory Deductions. Any amounts to which the Executive is entitled
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as compensation, bonus, merit bonus, or any other form of compensation subject
to withholding shall be subject to usual deduction for appropriate federal,
state, and local income tax obligations of the Executive.
11. Notices. Any notice provided for in this Agreement shall be given in
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writing. Notices shall be effective from the date of receipt, if delivered
personally to the party to whom notice is to be given, or on the second day
after mailing, if mailed by first class mail, postage prepaid. Notices shall be
properly addressed to the parties at their respective addresses set forth below
or to such other address as either party may later specify by notice to the
other:
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If to the Employer:
Strategix Solutions, Inc.
Centennial Park
Xxx Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
With a copy to its General Counsel
If to the Executive:
To the then current address of the
Executive appearing in the
corporate records of the Company
12. Entire Agreement. This Agreement contains the entire agreement and
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supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof. This Agreement may be changed only by an
agreement in writing signed by the party against whom any waiver, change,
amendment or modification is sought.
13. Waiver. The waiver by one party of a breach of any of the provisions
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of this Agreement by the other shall not be construed as a waiver of any
subsequent breach.
14. Governing Law; Venue. The Agreement shall be construed and enforced
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in accordance with the laws of the State of New York.
15. Paragraph Headings. Paragraph headings are for convenience only and
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are not intended to expand or restrict the scope or substance of the provisions
of this Agreement.
16. Assignability. The rights and obligations of the Employer under this
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Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Employer. This Agreement is a personal employment agreement
and the rights, obligations, and interests of the Executive hereunder may not be
sold, assigned, transferred, pledged, or hypothecated.
17. Severability. If any provision of this Agreement is held by a court
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of competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement shall remain in full force and shall in no way be impaired.
18. Counterparts. This Agreement may be executed in two (2) or more
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counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to account for more than one (1)
such counterpart.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
STRATEGIX SOLUTIONS, INC.
By:
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Xxxxx X. Xxxxx
Chairman of the Board
THE EXECUTIVE
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Xxxxxxxx X. Xxxxxx
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