EXHIBIT 10.16 -- EMPLOYMENT AGREEMENT
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AGREEMENT is entered into by and between TechTeam Global, Inc.
(the "Company"), and Xxxxxxx X. Xxxxx, Xx. (the "Executive"), effective as of
January 1, 2003.
1. Employment Period. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to remain in the employ of the Company subject to the
terms and conditions of this Agreement, for the period commencing on January 1,
2003 (the "Commencement Date") and ending when terminated as provided herein
(the "Employment Period").
2. Terms of Employment.
a) Position and Duties.
(i) During the Employment Period, the Executive shall
serve as Company's President and Chief Executive
Officer. Executive shall report to the Chairman of
the Company's Board of Directors (the "Board").
(ii) During the Employment Period, Executive agrees to
devote his full attention and time to the business
and affairs of the Company and to use the Executive's
best efforts to: (A) perform such responsibilities in
a professional manner, (B) promote the interests of
the Company and its subsidiaries, (C) discharge the
executive and administrative duties, not inconsistent
with his position, as may be reasonably assigned to
him by the Board, and (D) serve, without additional
compensation, as a director of the Company.
(iii) At all times, Executive agrees that he has read and
will abide by, any employee handbook, policy, or
practice that the Company has or adopts with respect
to its employees generally, except as modified by
this Agreement.
b) Compensation.
(i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary
("Annual Base Salary") of $330,000.00. The Annual
Base Salary shall be paid in accordance with the
Company's normal payroll practices for senior
executives subject only to such payroll and
withholding deductions as are required by law.
(ii) Annual Incentive. As of each December 31 during the
Employment Period, the Executive shall be eligible to
receive an annual incentive bonus to be determined by
the Board. Should a bonus plan be implemented for
senior management of the Company, the Executive will
receive his annual incentive bonus pursuant to such
plan.
(iii) Savings and Retirement Plans. During the Employment
Period, the Executive shall be eligible to
participate in all savings and retirement plans,
practices, policies and programs to the extent
applicable generally to other executives of the
Company in accordance with the provisions of those
plans.
(iv) Welfare and Other Benefits Plans. During the
Employment Period, the Executive and the Executive's
eligible family members shall be entitled to
participate in all benefit and executive perquisites
under welfare, fringe and other similar benefit
plans, practices, policies and programs which may be
provided by the Company (including, without
limitation, medical, prescription, dental,
disability, employee life, group life, accidental
death and travel accident insurance plans and
programs) to the extent applicable generally to other
executives of the Company.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for
all reasonable business expenses incurred and
submitted by the Executive in accordance with the
policies of the Company.
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3. Termination of Employment.
The Executive's employment may be terminated upon the occurrence of any
event set forth below.
a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith
that the Disability (as defined below) of the Executive has
occurred during the Employment Period, it may give to the
Executive written notice of its intention to terminate the
Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the
thirtieth day after receipt of such notice by the Executive.
For purposes of this Agreement, "Disability" shall mean the
Executive's inability to perform his normal duties for the
Company for three months or more during any twelve-month
period.
b) Cause. Until December 31, 2004, the Company may terminate the
Executive's employment only for "Cause." For purposes of this
Agreement, "Cause" shall mean:
(i) any material breach of this Agreement by the
Executive, which breach is not remedied within thirty
(30) days after written notice thereof, specifying
the nature of such breach in reasonable detail, is
given by the Board to the Executive,
(ii) Executive's conviction of a felony or other crime
involving moral turpitude, any act or omission by the
Executive during the Employment Period involving
willful malfeasance or gross negligence in the
performance of his duties hereunder, and/or
(iii) Executive's failure to follow the reasonable
instructions given in good faith by the Board, which
failure is not remedied within thirty (30) days after
written notice thereof specifying the details of such
conduct is given by the Board to the Executive.
(vi) Purchase of a majority of Company's stock or
acquisition of the Company through merger or
otherwise.
c) By Executive. After December 31, 2004, this Agreement may be
terminated by the Executive, upon sixty (60) days prior notice
to the Company. In such event, the effective date of
termination shall be the date set forth in such notice.
d) Without Cause. After December 31, 2004, this Agreement may be
terminated by the Company, without Cause, upon sixty (60) days
prior notice to the Executive. In such event, the effective
date of termination shall be the date set forth in such
notice. If the Executive is terminated by the Company without
cause prior to December 31, 2004, the Executive will be
entitled to his pay and benefits as set forth herein through
December 31, 2004.
e) Notice of Termination. Any termination by the Company or by
the Executive shall be communicated by Notice of Termination
to the other party. A "Notice of Termination" means a written
notice which (i) 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 under the provision so indicated and (iii) if the
Date of Termination is other than the date of receipt of such
notice, specifies the termination date.
f) Date of Termination. "Date of Termination" or "Termination
Date" means the effective date of termination determined in
accordance with the provisions of this Paragraph 3.
4. Confidential Information; Non-competition.
a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which
shall have been obtained by the Executive during the
Executive's employment by the company or any of its affiliated
companies and which shall not be or become public knowledge
(other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination
of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or
as many otherwise be required by law or legal process
(provided the Company has been given notice of and
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opportunity to challenge or limit the scope of disclosure
purportedly so required), communicate or divulge any such
information, knowledge or data to anyone other than the
Company and those designated by it.
b) Executive agrees not to utilize his knowledge of the business
of the Company or his relationships with investors, suppliers,
customers, clients, or financial institutions to compete with
the Company in any business the same as, or similar to, the
business conducted by the Company during the term of this
Agreement. Executive agrees that he will not:
1. Executive agrees not to work for, consult with,
provide any services to or provide any information to
any firm or entity or person which competes with, or
is engages in, or carries on any aspect of the
Company's businesses services in competition with the
Company within a two (2) year period following his
termination from the Company; and
2. Executive shall not directly or indirectly, assist,
promote or encourage any employees or clients of the
Company to terminate or discontinue their
relationship with the Company for at least a one (1)
year period beginning on the Date of Termination.
c) Executive acknowledges that his services hereunder are of a
special, unique, and intellectual character and his position
with the Company places him in a position of confidence and
trust with customers, suppliers, and employees of the Company.
The Executive further acknowledges that to perform his
position, he will necessarily be given access to confidential
information of the Company. Executive will continue to develop
personal relationships with the Company's customers,
financiers, suppliers, and employees. The parties expressly
agree that these provisions are reasonable, enforceable, and
necessary to protect the Company's interests. In the unlikely
event, however, that a court of competent jurisdiction were to
determine that any portion of such provisions is
unenforceable, then the parties agree that the remainder of
the provisions shall remain valid and enforceable to the
maximum extent possible.
d) The Executive agrees that it would be difficult to measure
damages to the Company from any breach of the covenants
contained in this Paragraph 5, but that such damages from any
such breach would be great, incalculable and irremediable, and
that money damages would be an inadequate remedy. Accordingly,
the Executive agrees that the Company may have specific
performance of these provisions in any court of competent
jurisdiction. The parties agree, however, that the specific
performance remedies described above shall not be the
exclusive remedies, and the Company may enforce any other
remedy or remedies available to it either in law or in equity
including, but not limited to, temporary, preliminary, and/or
permanent injunctive relief.
5. Successors.
a) This Agreement is personal to the Executive and shall not be
assignable by the Executive.
b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
6. Change of Control. Company agrees to fully include Executive in its
Change of Control program, wherein Executive will qualify for one year
of continued compensation and benefits upon the occurrence of a Change
in Control of the Company. In no event will Executive's wage
compensation as a result a transaction involving the Company, exceed
one year's annual salary.
7. Miscellaneous.
a) This Agreement shall be governed by and construed in
accordance with the laws of Michigan, without reference to
principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force
or effect. This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
b) All notices and other communications hereunder shall be in
writing and shall be deemed to be received when (i) hand
delivered (with written confirmation of receipt), (ii) when
received by the addressee, if sent by nationally recognized
overnight delivery service (receipt requested) in each
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case to such address as a party may designate by notice to the
other party.
c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
d) This Employment Agreement may be executed through the use of
separate signature pages or in any number of counterpart
copies, and each of such counterparts shall, for all purposes,
constitute one agreement binding on all the parties.
e) The provisions of this Agreement contain all of the terms and
conditions agreed upon by the parties relating to the subject
matter of this Agreement and shall supersede all prior
agreement, negotiations, correspondence, undertakings and
communications of the parties, either oral or written, with
respect to such subject matter.
IN WITNESS WHEREOF, the Executive has executed this Agreement and,
subject to the authorization of its Board of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, as of the Commencement
Date.
Date: March 03, 2003 By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Xxxxxxx X. Xxxxx, Xx.
"Executive"
Date: March 12, 2003 TECHTEAM GLOBAL, INC.
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By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Chairman of
Board of Directors
"Company"
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