EMPLOYMENT AGREEMENT
Exhibit 10.35
THIS AGREEMENT is made on the 2nd day of November, 2009 by and between Xxxx X.
Xxxxxxxxxx (the “Employee”) and TEAMSTAFF, INC., a New Jersey corporation (the “Company”) and is
effective as of the 1st day of October, 2009. (Unless the context indicates otherwise,
the “Company” shall include the Company’s subsidiaries.)
W I T N E S S E T H:
WHEREAS, the Company and its subsidiaries are engaged in the business of providing Business
Outsourcing Services; and
WHEREAS, the Employee is currently employed by the Company and the Company desires to continue
the employment of the Employee and secure for the Company the experience, ability and services of
the Employee; and
WHEREAS, the Employee desires to continue his employment with the Company, pursuant to the
terms and conditions herein set forth, superseding all prior oral and written employment
agreements, and term sheets and letters 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 1
DEFINITIONS
1.1 Accrued Compensation. Accrued Compensation shall mean an amount which
shall include all amounts earned or accrued through the “Termination Date” (as defined below) but
not paid as of the Termination Date, including (i) Base Salary, (ii) reimbursement for business
expenses incurred by the Employee on behalf of the Company, pursuant to the Company’s expense
reimbursement policy in effect at such time, (iii) vacation pay, and (iv) unpaid bonuses and
incentive compensation earned and awarded prior to the Termination Date.
1.2 Cause. Cause shall mean: (i) willful disobedience by the Employee of a material and lawful
instruction of the Board of Directors of the Company; (ii) formal charge, indictment or conviction
of the Employee of any misdemeanor involving fraud or embezzlement or similar crime, or any felony;
(iii) conduct amounting to fraud, dishonesty, gross negligence, willful misconduct or recurring
insubordination; or (iv) excessive absences from work, other than for illness or Disability;
provided that the Company shall not have the right to terminate the employment of Employee pursuant
to the foregoing clauses (i), (iii), and (iv) 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.
1.3 Change in Control. “Change in Control” shall mean any of the following events:
a. (i) An acquisition (other than directly from the Company) of any voting securities of the
Company (the “Voting Securities”) by any “Person” (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”))
immediately after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of twenty percent (20%) or more of the combined voting power of the
Company’s then outstanding Voting Securities (27% if such Person is Wynnnefield Capital Inc. and
its affiliates); provided, however, that in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a “Non-Control Acquisition” (as defined below) shall not
constitute an acquisition which would cause a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (1) an employee
benefit plan (or a trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its equity securities or
equity interest is owned directly or indirectly by the Company (a “Subsidiary”), or (2) the Company
or any Subsidiary.
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(ii) Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely
because a Person (the “Subject Person”) gained Beneficial Ownership of more than the permitted
amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by
the Company which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then
a Change in Control shall occur.
b. The individuals who, as of the date this Agreement is approved by the Board, are members of
the Board (the “Incumbent Board”), cease for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination for election by the Company’s
stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement, be considered and defined as a
member of the Incumbent Board; and provided, further, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual “Election Contest” (as described in Rule 14a-11 promulgated under
the 0000 Xxx) or other solicitation of proxies or consents by or on behalf of a Person other than
the Board (a “Proxy Contest”); or
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c. Approval by stockholders of the Company of:
(i) A merger, consolidation or reorganization involving the Company, unless: (1) the
stockholders of the Company, immediately before such merger, consolidation or reorganization, own,
directly or indirectly immediately following such merger, consolidation or reorganization, at least
sixty percent (60%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, (2) the individuals who were
members of the Incumbent Board immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least two-thirds of the members of the
board of directors of the Surviving Corporation, and (3) no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the
Company, the Surviving Corporation or any Subsidiary) becomes Beneficial Owner of twenty percent
(20%) or more of the combined voting power of the Surviving Corporation’s then outstanding voting
securities as a result of such merger (27% if such Person is Wynnnefield Capital Inc. and its
affiliates) , consolidation or reorganization, a transaction described in clauses (1) through (3)
shall herein be referred to as a “Non-Control Transaction”; or
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(ii) An agreement for the sale or other disposition of all or substantially all of the assets
of the Company, to any Person, other than a transfer to a Subsidiary, in one transaction or a
series of related transactions;
(iii) The stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.
d. Notwithstanding anything contained in this Agreement to the contrary, if the Employee’s
employment is terminated prior to a Change in Control and the Employee reasonably demonstrates that
such termination (i) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control (a “Third Party”) or (ii) otherwise
occurred in connection with, or in anticipation of, a Change in Control, then for all purposes of
this Agreement, the date of a Change in Control with respect to the Employee shall mean the date
immediately prior to the date of such termination of the Employee’s employment.
1.4 Continuation Benefits. Continuation Benefits shall be the continuation of the Benefits,
as defined in Section 5.1, for the period commencing on the Termination Date and terminating 12
months thereafter, or such other period as specifically stated by this agreement (the “Continuation
Period”) at the Company’s expense on behalf of the Employee and his dependents; provided, however,
that (i) in no event shall the Continuation Period exceed 18 months from the Termination Date; and
(ii) the level and availability of benefits provided during the Continuation Period shall at all
times be subject to the post-employment conversion or portability provisions of the benefit plans.
The Company’s obligation hereunder with respect to the foregoing benefits shall also be limited to
the extent that if the Employee obtains any such benefits pursuant to a subsequent
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employer’s benefit plans, the Company may reduce the coverage of any benefits it is required
to provide the Employee hereunder as long as the aggregate coverage and benefits of the combined
benefit plans is no less favorable to the Employee than the coverage and benefits required to be
provided hereunder. This definition of Continuation Benefits shall not be interpreted so as to
limit any benefits to which the Employee, his dependents or beneficiaries may be entitled under
any of the Company’s employee benefit plans, programs or practices following the Employee’s
termination of employment, including, without limitation, retiree medical and life insurance
benefits. Notwithstanding the foregoing, Employee shall be entitled to take advantage of the COBRA
benefits to the maximum amount permitted by law.
1.5 Disability. Disability shall mean a physical or mental infirmity which impairs the
Employee’s ability to substantially perform his duties with the Company for a period of one hundred
eighty (180) consecutive days and the Employee has not returned to his full time employment prior
to the Termination Date as stated in the “Notice of Termination” (as defined below).
1.6 Good Reason. “Good Reason” shall mean without the written consent of the Employee: (A) a
material breach of any provision of this Agreement by the Company; (B) failure by the Company to
pay when due any compensation to the Employee; (C) a reduction in the Employee’s Base Salary; (D)
failure by the Company to maintain the Employee in the positions referred to in Section 2.1 of this
Agreement for a period in excess of 30 days after the Board of Directors has reassigned Employee or
designated an individual other than Employee to assume the office of Chief Executive Officer; (E)
assignment to the Employee of any duties materially and adversely inconsistent with the Employee’s
positions, authority, duties, responsibilities, powers, functions, reporting relationship or title
as contemplated by Section 2.1 of this Agreement or any
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other action by the Company that results in a material diminution of such positions,
authority, duties, responsibilities, powers, functions, reporting relationship or title except for
a period of up to 30 days after the Board of Directors has designated an individual other than
Employee to assume the office of Chief Executive Officer; (F) relocation of Employee’s principal
place of employment to a location outside a 25 mile radius of the present location in Somerset, New
Jersey, without the Employee’s written consent; or (G) a Change in Control, provided the event on
which the Change of Control is predicated occurs within 90 days of the service of the Notice of
Termination by the Employee, it being understood that Employee shall have the right to terminate
his employment under this Section 1.6 (G) for any reason or no reason within such 90 day period;
and provided further, however, that the Employee agrees not to terminate his employment for Good
Reason pursuant to clauses (A) through (F) unless (a) the Employee has given the Company at least
10 days’ prior written notice of his intent to terminate his employment for Good Reason, which
notice shall specify the facts and circumstances constituting Good Reason; and (b) the Company has
not remedied such facts and circumstances constituting Good Reason to the reasonable and good faith
satisfaction of the Employee within a 10-day period after receipt of such notice.
1.7 Notice of Termination. Notice of Termination shall mean a written notice from the
Company, or the Employee, of termination of the Employee’s employment which indicates the provision
in this Agreement relied upon, if any and which 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. A Notice of Termination served by the Company shall specify the effective
date of termination.
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1.8 Severance Payment. “Severance Payment” shall mean an amount equal to the sum of 12 months
of Employee’s Base Salary in effect on the Termination Date. Unless otherwise specifically
provided herein, the Severance Payment shall be payable in equal installments on each of the
Company’s regular pay dates for executives during the twelve months commencing on the first
regular executive pay date following the Termination Date. The Severance Payment is conditioned on
the Employee executing a termination agreement and release in a form reasonably acceptable to the
Employee and the Company.
1.9 Termination Date. Termination Date shall mean (i) in the case of the Employee’s death, his
date of death; (ii) in the case of Good Reason, 30 days from the date the Notice of Termination is
given to the Company, provided the Company has not remedied such facts and circumstances
constituting Good Reason to the reasonable and good faith satisfaction of the Employee; and (iii)
in all other cases, the date specified in the Notice of Termination; provided, however, if the
Employee’s employment is terminated by the Company for any reason except Cause, the date specified
in the Notice of Termination shall be at least 30 days from the date the Notice of Termination is
given to the Employee, and provided further that in the case of Disability, the Employee shall not
have returned to the full-time performance of his duties during such period of at least 30 days.
ARTICLE II
EMPLOYMENT
2.1 Subject to and upon the terms and conditions of this Agreement, the Company hereby agrees
to continue the employment of the Employee, and the Employee hereby accepts such employment, as
President and Chief Executive Officer of the Company. The Employee’s
position includes acting as an officer and/or director of any of the Company’s subsidiaries as
determined by the Board of Directors. The Employee agrees to resign from the Board upon the
termination of employment for any reason.
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ARTICLE III
DUTIES
3.1 The Employee shall, during the term of his employment with the Company, and subject to the
direction and control of the Company’s Board of Directors, perform such duties and functions as he
may be called upon to perform by the Company’s Board of Directors during the term of this
Agreement, consistent with his position as President and Chief Executive Officer.
3.2 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):
(i) Those duties attendant to the position of Chief Executive Officer;
(ii) Establish and implement current and long range objectives, plans, and policies, subject
to the approval of the Board of Directors;
(iii) Financial planning including the development of, liaison with, financing sources and
investment bankers;
(iv) Managerial oversight of the Company’s business;
(v) Shareholder relations;
(vi) Compliance with local, state and federal regulations and laws governing business
operations;
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(vii) Business expansion of the Company including acquisitions, joint ventures, and other
opportunities;
(viii) Promotion of the relationships of the Company and its subsidiaries with their
respective employees, customers, suppliers and others in the business community;
(ix) Use best efforts to assist in the divestiture or closure of any business unit as directed
by the Board of Directors; and
(x) Assist, in Somerset NJ, in the transition to a new chief executive officer.
3.3 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.
3.4 Employee shall undertake regular travel to the Company’s executive and operational
offices, and such other occasional travel within or outside the United States as is or may be
reasonably necessary in the interests of the Company. All such travel shall be at the sole cost
and expense of the Company and shall include reasonable lodging and food costs incurred by Employee
while traveling.
ARTICLE IV
COMPENSATION
4.1 During the term of this Agreement, Employee shall be compensated initially at the rate of
$290,000 per annum, subject to such increases, if any, as determined by the Board of Directors, or
if the Board so designates, the Management Resources and Compensation Committee, in its discretion,
at the commencement of each of the Company’s fiscal years during the term of this Agreement (the
“Base Salary”). The base salary shall be paid to the Employee in accordance with the Company’s
regular executive payroll periods.
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4.2 Employee may receive a bonus (the “Bonus”) in the sole discretion of the Management
Resources and Compensation Committee of the Board of Directors.
4.3 The Company shall deduct from Employee’s compensation all federal, state, and local taxes
which it may now or hereafter be required to deduct.
4.4 Employee may receive such other additional compensation as may be determined from time to
time by the Board of Directors including bonuses and other long term compensation plans. Nothing
herein shall be deemed or construed to require the Board to award any bonus or additional
compensation.
ARTICLE V
BENEFITS
5.1 During the term hereof, the Company shall provide Employee with the following benefits
(the “Benefits”): (i) group health care and insurance benefits as generally made available to the
Company’s senior management; and (ii) such other insurance benefits obtained by the Company and
made generally available to the Company’s senior management. The Company shall reimburse Employee,
upon presentation of appropriate vouchers, for all reasonable business expenses incurred by
Employee on behalf of the Company upon presentation of suitable documentation.
5.2 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.
5.3 For the term of this Agreement, Employee shall be entitled to paid vacation at the rate of
five (5) weeks per annum.
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ARTICLE VI
NON-DISCLOSURE
6.1 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,
accounting , personnel and/or staffing business of the Company and its subsidiaries, including
information relating to any customer of the Company or pool of temporary or permanent employees,
governmental customer 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. Trade secrets and confidential information shall cease to be trade secrets or
confidential information, as applicable, at such time as such information becomes public other than
through disclosure, directly or indirectly, by Employee in violation of this Agreement.
6.2 If Employee is requested or required (by oral questions, interrogatories, requests for
information or document subpoenas, civil investigative demands, or similar process) to disclose any
Proprietary Information, Employee shall, unless prohibited by law, promptly notify the Company of
such request(s) so that the Company may seek an appropriate protective order.
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ARTICLE VII
RESTRICTIVE COVENANT
7.1 In the event of the termination of employment for any reason, Employee agrees that he will
not, for a period of one (1) year following such termination, 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 is involved in the business of providing
(i) temporary and/or permanent staffing of governmental employees, travel health professionals
and/or travel nurses, (ii) medical and office administration/technical professionals through
Federal Supply Schedule (“FSS”) contracts with both the United States General Services
Administration (“GSA”), United States Department of Veterans Affairs (“DVA”), United States
Department of Defense (“DOD”) or other federal, state and local entities, or (iii) is otherwise
engaged in the same or similar business as the Company in direct competition with the Company, or
which the Company was 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 five percent of
the shares of any publicly held corporation shall not violate the provisions of this Article VII.
In furtherance of, and in addition to, the foregoing, Employee shall not during the aforesaid
period of non-competition, directly or indirectly, in connection with any temporary or permanent
employee placement, governmental staffing or any other business the Company and its subsidiaries,
including information relating to any customer of the Company or pool of temporary employees, or
any other nonpublic business information , or any business similar to the business in which the
Company was engaged, or in the process of developing during Employee’s tenure with 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.
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7.2 If any court shall hold that the duration of non-competition or any other restriction
contained in this Article VII 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 VIII
TERM
8.1 This Agreement shall be for a term (the “Initial Term”) commencing on October 1, 2009 (the
“Commencement Date”) and terminating on January 31, 2010, unless such term is extended in writing
by mutual agreement of Employee and the Company at any time prior to ten days before the later of
the expiration of the Initial Term, or the extension period (the “Expiration Date”).
ARTICLE IX
TERMINATION
9.1 The Company may terminate this Agreement by giving a Notice of Termination to the Employee
in accordance with this Agreement:
(i) for Cause;
(ii) without Cause;
(iii) for Disability.
9.2 Employee may terminate this Agreement by giving a Notice of Termination to the Company in
accordance with this Agreement, at any time, with or without Good Reason.
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9.3 If the Employee’s employment with the Company shall be terminated, the Company shall pay
and/or provide to the Employee the following compensation and benefits in lieu of any other
compensation or benefits arising under this Agreement or otherwise:
(i) if the Employee was terminated by the Company for Cause, or the Employee terminates
without Good Reason, the Accrued Compensation;
(ii) if the Employee was terminated by the Company for Disability,
(a) the Continuation Benefits;
(b) the Accrued Compensation; and
(c) the Severance Payment; or
(iii) if termination was due to the Employee’s death,
(a) the Accrued Compensation; and
(b) the Continuation Benefits; or
(iv) if the Employee was terminated by the Company without cause, or the Employee terminates
this Agreement for Good Reason,
(a) the Accrued Compensation;
(b) the Severance Payment; and
(c) the Continuation Benefits.
9.4 The amounts payable under this Section 9, shall be paid as follows:
(i) Accrued Compensation shall be paid within five (5) business days after the Employee’s
Termination Date (or earlier, if required by applicable law).
(ii) If the Continuation Benefits are paid in cash, the payments shall be made on the first
day of each month during the Continuation Period (or earlier, if required by applicable law).
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9.5 Notwithstanding the foregoing, in the event Employee is a member of the Board of Directors
on the Termination Date, the payment of any and all compensation due hereunder, except Accrued
Compensation, and Employee’s right to exercise any Employee Stock Option after the Termination
Date, is expressly conditioned on Employee’s resignation from the Board of Directors within five
(5) business days of notice by the Company requesting such resignation.
9.6 The Employee shall not be required to mitigate the amount of any payment provided for in
this Agreement by seeking other employment or otherwise and no such payment shall be offset or
reduced by the amount of any compensation or benefits provided to the Employee in any subsequent
employment except as provided in Sections 1.4.
ARTICLE X
TERMINATION OF PRIOR AGREEMENTS
10.1 This Agreement sets forth the entire agreement between the parties and supersedes all
prior agreements, letters and understandings between the parties, whether oral or written prior to
the effective date of this Agreement except for the terms of employee stock option plans,
restricted stock grants and option certificates.
ARTICLE XI
RESTRICTED STOCK GRANTS
11.1 In the event of a Change of Control, as defined in Section 1.3, or termination without
cause by the Company or for Good Reason by Employee, the conditions to the vesting of any
outstanding Restricted Stock Awards granted to the Employee shall be deemed void and all such
Shares shall be deemed immediately and fully vested and shall be promptly delivered to the
Employee. Employee agrees that Employee will not sell the 35,000 restricted shares of the
Company’s Common Stock originally scheduled to vest in January 2011, and the shares of Common
Stock underlying the option granted pursuant to Section 11.2, until the earlier of a change of
control or January 31, 2011.
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11.2 As an inducement to Employee to enter into this Agreement, the Company hereby grants to
Employee options to purchase 30,000 shares of the Company’s Common Stock, $.001 par value (the
“Options”), subject to the terms and conditions of the Company’s 2006 Long Term Incentive Plan (the
“Plan”), and the terms and conditions set forth in the Stock Option Agreement which are
incorporated herein by reference. The Options shall be exercisable for a period of five years from
the date of this Agreement and vest on the Termination Date provided:
(i) Employee shall have used his best efforts to assist in the divestiture or closure of any
business unit as directed by the Board of Directors ; and
(ii) Employee shall assist, in Somerset NJ, in the transition to a new chief executive
officer.
11.3 The exercise price of the Options shall be equal to the closing price of the Company’s
Common Stock as reported by Nasdaq on the date of final execution of this Agreement and shall
contain such other terms and conditions as set forth in the stock option agreement. 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 Options shall terminate as
provided in the Plan, except as otherwise modified by this Agreement or the stock option agreement.
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11.4 In the event of a termination of Employee’s employment with the Company by the Employee
for Good Reason, notwithstanding anything herein or in any stock option agreement to the contrary,
(a) the Employee’s right to purchase shares of Common Stock of the Company pursuant to any stock
option or stock option plan shall immediately fully vest and become exercisable, (b) the exercise
period in which Employee may exercise his options to purchase Company common stock shall be
extended to the duration of their original term, as if Employee remained an employee of the
Company, and the terms of such options shall be deemed amended to reflect the foregoing provisions.
11.5 In the event of a termination of Employee’s employment with the Company pursuant to
Section 9.1(i), options granted and not exercised as of the Termination Date shall terminate
immediately and be null and void. In the event of a termination of Employee’s employment with the
Company due to the Employee’s death, or Disability, the Employee’s (or his estate’s or legal
representative’s) right to purchase shares of Common Stock of the Company pursuant to any stock
option or stock option plan to the extent vested as of the Termination Date shall remain
exercisable for a period of twelve (12) months following the Termination Date, but in no event
after the expiration of the exercise period. In the event of a termination of Employee’s employment
with the Company by the Employee other than for Good Reason, the Employee’s right to purchase
shares of Common Stock of the Company pursuant to any stock option or stock option plan to the
extent vested as of the Termination Date shall remain exercisable for a period of three months
following the Termination Date, but in no event after the expiration of the exercise period.
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ARTICLE XII
EXTRAORDINARY TRANSACTIONS
12.1 The Company’s Board of Directors has determined that it is appropriate to reinforce and
encourage the continued attention and dedication of members of the Company’s management, including
the Employee, to their assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
In the event that within one hundred eighty days (180) days of a Change of Control as
described in Section 12.2, (i) Employee is terminated, or (ii) Employee’s status, title, position
or responsibilities are materially reduced and Employee terminates his Employment, the Company
shall pay and/or provide to the Employee, the following compensation and benefits:
| a. | The Company shall pay the Employee, in lieu of any other
payments due hereunder, (i) the Accrued Compensation; (ii) the Continuation
Benefits; and (iii) the Severance Payment, payable ten days after the
Termination Date, in one lump sum; and |
||
| b. | The conditions to the vesting of any outstanding incentive
awards (including restricted stock, stock options and granted performance
shares or units) granted to the Employee under any of the Company’s plans, or
under any other incentive plan or arrangement, shall be deemed void and all
such incentive awards shall be immediately and fully vested and exercisable.
Further, the options shall be deemed amended to provide that in the event of
termination after an event enumerated in this Article XII, the options shall
remain exercisable for the duration of their term. |
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12.4 Notwithstanding the foregoing, if the payment under this Article XII, either alone or
together with other payments which the Employee has the right to receive from the Company, would
constitute an “excess parachute payment” as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), the aggregate of such credits or payments under this Agreement and
other agreements shall be reduced to the largest amount as will result in no portion of such
aggregate payments being subject to the excise tax imposed by Section 4999 of the Code. The
priority of the reduction of excess parachute payments shall be in the discretion of the Employee.
The Company shall give notice to the Employee as soon as practicable after its determination that
Change of Control payments and benefits are subject to the excise tax, but no later than ten (10)
days in advance of the due date of such Change of Control payments and benefits, specifying the
proposed date of payment and the Change of Control benefits and payments subject to the excise tax.
Employee shall exercise his option under this paragraph 12.4 by written notice to the Company
within five (5) days in advance of the due date of the Change of Control payments and benefits
specifying the priority of reduction of the excess parachute payments.
ARTICLE XIII
ARBITRATION AND INDEMNIFICATION
13.1 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 VI or
VII hereof shall be settled through final and binding arbitration before a single arbitrator in the
State of New Jersey 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.
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13.2 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, to the fullest extent permitted by law, except for claims based on Employee’s
fraud, deceit or willfulness. 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 during the term of Employee’s employment with the Company and for a
period of six (6) years after the date of termination of employment for any reason. The provisions
of this Section 13.2 are in addition to and not in lieu of any indemnification, defense or other
benefit to which Employee may be entitled by statute, regulation, common law or otherwise.
ARTICLE XIV
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 XV
NOTICE
For the purposes of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when (a) personally
delivered or (b) sent by (i) a nationally recognized overnight courier service or (ii) certified mail,
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return receipt requested, postage prepaid and in each case addressed to the respective
addresses as set forth below or to any such other address as the party to receive the notice shall
advise by due notice given in accordance with this paragraph. All notices and communications shall
be deemed to have been received on (A) if delivered by personal service, the date of delivery
thereof; (B) if delivered by a nationally recognized overnight courier service, on the first
business day following deposit with such courier service; or (C) on the third business day after
the mailing thereof via certified mail. Notwithstanding the foregoing, any notice of change of
address shall be effective only upon receipt.
The current addresses of the parties are as follows:
| IF TO THE COMPANY: | TeamStaff, Inc. 0 Xxxxxxxxx Xxxxx Xxxxxxxx, XX 00000 |
|||
| WITH A COPY TO: | Xxxxxx X. XxXxxxx Xxxxxx & Xxxxxxxxx, LLP 00 Xxxxxxxx Xxx Xxxx, XX 00000 |
|||
| IF TO THE EMPLOYEE: |
ARTICLE XVI
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 XVII
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.
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ARTICLE XVIII
GOVERNING LAW
This Agreement has been negotiated and executed in the State of New Jersey which shall govern
its construction and validity.
ARTICLE XIX
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 New Jersey, and Employee
and the Company each hereby consent to the jurisdiction of any local, state, or federal court
located within the State of New Jersey.
ARTICLE XX
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.
| TEAMSTAFF, INC. |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Xxxxx Xxxxx | ||||
| Chairman of the Management Resources and Compensation Committee |
||||
| /s/ Xxxx X. Xxxxxxxxxx | ||||
| Xxxx X. Xxxxxxxxxx | ||||
| Employee | ||||
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