EXHIBIT 10.7
FORM OF
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of July 1, 1998 (the
"Effective Date"), by and between Strategix Solutions, Inc., a Delaware
corporation (the "Employer") and Xxxxx X. Xxxxxxxx, a resident of the State of
New York (the "Executive").
In consideration of the mutual promises, agreements and covenants, and
subject to the terms and conditions contained in this Agreement, the Employer
and the Executive, intending to be legally bound, hereby agree as follows:
1. Employment. The Employer hereby agrees to employ the Executive as
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President and Chief Operating Officer of Employer, and the Executive hereby
accepts such employment by the Employer, in accordance with and subject to the
terms and conditions of this Agreement. The Executive will report directly to
the Chief Executive Officer of Employer.
2. Duties and Authority. As President and Chief Operating Officer of
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Employer, the Executive shall be responsible for operational management, fiscal
responsibilities, and strategic planning of Employer, and shall perform such
other duties as are assigned to the Executive by the Chief Executive Officer of
the Employer. The Executive agrees to devote his full time, attention and best
efforts to the performance of his duties hereunder.
3. Term, Employment Period. The term of employment shall begin on the
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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 no. 8.F. below) shall be referred to herein as the
"Employment Period."
4. Compensation. During the Employment Period, the Executive will receive
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the following compensation:
A. Base Salary. A base annual salary of $250,000 (the "Base
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Salary"),payable in accordance with the Employer's standard practice for other
comparable executives.
B. Incentive Compensation. Additional compensation (the
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"Incentive Compensation") equal to .75% 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. 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 $500,000
per annum, such limitation to be reviewed annually by the Chief Executive
Officer subject to approval by the Compensation Committee of the Board of
Directors.
5. Stock Options. On or about the Effective Date, Employer shall grant to
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the Executive 125,000 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 8.C. of
this Agreement, all unvested options shall vest.
6. 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 Employer shall pay the Executive $750 per month for an
automobile used by the Executive for business purposes. Employer shall pay
Executive's club dues up to $15,000 per year. 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.
7. 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:
A. Non-Competition. During the Employment Period and for a
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period of two(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
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as it exists at that time, including temporary staffing, direct-hire staffing,
and outsourcing.
B. Non-Solicitation. During the Employment Period and for a
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period of two (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
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time, 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.
8. Termination of Employment.
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A. Death or Disability. The Executive's employment shall
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terminate 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
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).
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B. Cause. The Employer may terminate the Executive's employment
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during 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 no. 2 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,
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"Change in 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;
(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
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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
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terminate this Agreement without Cause or reason upon not less than thirty (30)
days written notice to the other, setting forth the effective date of
termination.
E. Notice of Termination. Any termination by the Employer for
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Cause shall 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
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of the term of the Agreement specified in paragraph no. 3 (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 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, 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.
9. 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
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Termination. Upon the termination of the Executive's employment following a
Change in 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; (ii) a lump sum payment of the present value of the pro
rata Incentive Compensation payment as determined through the Date of
Termination; and (iii) the payment of the Employer's share of Employee's health
insurance premium under COBRA for a period of one (1) year. 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.
10. Mitigation of Damages. The Executive shall not be required to
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mitigate 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.
11. 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.
12. 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:
If to the Employer:
Strategix Solutions, Inc.
Centennial Park
Xxx Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
With a copy to its General Counsel
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If to the Executive:
To the then current address of the
Executive appearing in the
corporate records of the Company
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. 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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Xxxxx X. Xxxxxxxx
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