Exhibit 10.13
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of December 1, 2002 (the
"Effective Date") between S. Cash Xxxxxxxxx ("Executive") and TEAM America,
Inc., an Ohio corporation (the "Company").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows:
1. Employment and Duties. On the terms and subject to the conditions
set forth in this Agreement, the Company agrees to employ Executive as its Chief
Executive Officer to render such services as would be customary for such
position and to render such other services and discharge such other
responsibilities as the Company's Board of Directors may, from time to time,
stipulate.
2. Performance. Executive accepts the employment described in Section 1
of this Agreement and agrees to faithfully discharge his duties and devote
adequate professional time and effort to the performance of the services
described therein.
3. Term. Executive's employment under this Agreement (the "Employment
Period") shall commence as of the Effective Date and continue until terminated
by either party. Executive's employment is "at will," so that it may be
terminated by either party at any time, with or without cause. On termination of
Executive's employment, Executive's entitlement to any severance pay shall be
governed by Section 7 hereof.
4. Compensation.
4.1 Salary. For all the services to be rendered by Executive hereunder,
the Company agrees to pay, during the Employment Period, a base salary at the
rate of not less than $350,000 ("Base Salary") per annum payable weekly or
otherwise according to the Company's regular pay schedule for salaried
employees. The Company and Executive agree that the salary provided herein shall
be subject to annual review for cost of living and merit factors, with any
adjustments being mutually agreed between the Company and Executive.
4.2 Incentive Compensation. With respect to each fiscal year of the
Company during the Employment Period, the Company will pay Executive a bonus of
up to 100% of the Base Salary set forth in Paragraph 4.1, or as thereafter in
effect, based upon achievement of an EBITDA objective (the "EBITDA Objective")
as determined from year to year pursuant to the Company's Senior Executive Bonus
Plan, as amended
from time to time. In addition, in the event the Company completes a sale,
merger or major refinance transaction in 2003 (a "Major Transaction"-- whether
such Major Transaction has occurred is to be determined in the good faith
judgment of the Board of Directors), Executive will receive a cash bonus of
$100,000.00 payable on closing of such transaction and the Company will
immediately on the closing of a Major Transaction award Executive with options
to acquire 100,000 qualified shares of its stock pursuant to its Incentive Stock
Option Plan, to be issued with an exercise price of $0.60 per share, with
vesting over four (4) years.
4.3 Vacation. Executive shall be entitled to take four (4) weeks of
vacation, with pay, during each year of service under this Agreement. Vacation
allowances shall cumulate from year to year based upon Company's standard
vacation policy. The foregoing notwithstanding, the Company acknowledges that
during 2001 and 2002, the press of duties on behalf of the Company has prevented
Executive from taking vacation. Accordingly, Company will pay Executive
additional compensation for 2002 equal to 2 weeks Base Salary and Executive will
carry over two (2) weeks vacation to 2003 in accordance with the Company
vacation policy.
4.4 Other Benefits. Except as otherwise specifically provided herein,
during the Employment Period Executive shall be eligible for all non-wage
benefits the Company provides generally for its other corporate officers.
5. Business Expenses.
5.1 Reimbursement. The Company shall reimburse Executive for the
reasonable, ordinary, and necessary expenses incurred by him in connection with
the performance of his duties hereunder, including but not limited to, ordinary
and necessary travel expenses, entertainment expenses and automobile allowance.
5.2 Accounting. Executive shall provide the Company with an accounting
of his expenses, which accounting shall clearly reflect which expenses are
reimbursable by the Company. Executive will provide the Company with such other
supporting documentation and other substantiation of reimbursable expenses as
will conform to Internal Revenue Service or other requirements.
6. Covenants of Executive.
6.1 Non-Competition Provisions. The Executive and the Company agree
that Company has protectable, private and confidential interests including but
not limited to marketing strategies, financial information, good will,
customers, customer lists, specific customer needs and contacts, current and
future business plans and the existence and terms of this Agreement, and as such
during the Employment Period the Executive shall not, without the written
consent of the Company, engage in, be employed by, act as a consultant for or
otherwise be compensated by, be a director of or own an equity interest in, any
business which is engaged in employee leasing, the provision of PEO or ASO
services, payroll and payroll tax service, employee benefits, or any other
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business which is competitive with the Company business or cause any Company
Client to cancel its relationship with the Company in order to purchase such
products or services, nor disclose or use for his own benefit any of the
protectable, private or confidential information belonging to or pertaining to
the Company or its affiliates to any party without the prior written consent of
the Company.
6.2 Non-Solicitation During and for a period of one (1) year following
the Employment Period, Executive shall not, as an employee, agent, owner,
contractor or in any other capacity, acting alone or in concert with others (i)
solicit the business of any customer or prospect of the Company or of any
businesses which were customers or prospects of the Company within two (2) years
preceding the termination of the Employment Period (collectively, "Company
Clients"); nor (ii) do business with or render services to any Company Client in
connection with any business similar to the business of the Company or its
subsidiaries, including, but not limited to, any business engaged in employee
leasing, the provision of PEO or ASO services, payroll and payroll tax service,
employee benefits, or job placement products or services or any other business
which would tend to compete with the Company business or cause any Company
Client to cancel its relationship with the company in order to purchase such
products or services; nor (iii) solicit, hire or interfere in any way with the
employment relationship between the Company and any of its employees (except the
foregoing shall not apply to Executive's family members or former law partner).
6.3 Confidentiality. The Executive agrees and acknowledges that, by
reason of the nature of his duties as an officer and employee, he will have or
may have access to and become informed of confidential and secret information
which is a competitive asset of the Company ("Confidential Information"),
including without limitation any lists of client organizations or worksite
employees, financial statistics, research data or any other statistics and plans
contained in profit plans, capital plans, critical issue plans, strategic plans
or marketing or operation plans or other trade secrets of the Company and any of
the foregoing which belong to any person or company but to which the Executive
has had access by reason of his employment relationship with the Company. The
Executive agrees faithfully to keep in strict confidence, and not, either
directly or indirectly, to make known, divulge, reveal, furnish, make available
or use (except for use in the regular course of his employment duties) any such
Confidential Information. The Executive acknowledges that all manuals,
instruction books, price lists, information and records and other information
and aids relating to the Company's business, and any and all other documents
containing Confidential Information furnished to the Executive by the Company or
otherwise acquired or developed by the Executive, shall at all times be the
property of the Company. Upon termination of the Employment Period, the
Executive shall return to the Company any such property or documents which are
in his possession, custody or control, but his obligation of confidentiality
shall survive such termination of the Employment Period until and unless any
such Confidential Information shall have become, through no fault of the
Executive, generally known to the trade. The obligations of the Executive under
this subsection are in addition to, and not in limitation or preemption of, all
other obligations of confidentiality which the Executive may have to the Company
under general legal or equitable principles.
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7. Termination.
7.1 Termination Without Cause; Severance.
(a) In the event Executive's employment with the Company is terminated
by the Company without cause (as defined below), or if Executive's employment is
terminated by reason of his death or disability, Executive shall be entitled to
severance pay in the amount described in section 7.1 (b) below ("Severance"). If
Executive's employment is terminated with cause, he shall not be entitled to
Severance.
(b) If Executive is entitled to Severance under Section 7.1(a), such
Severance, inclusive of any EBITDA bonus to which Executive may be entitled
under section 4.2, shall be equal to not less than 150% of his Base Salary in
effect at the time of termination, payable immediately on termination. The
Company shall use its best efforts to forthwith obtain a bond to secure this
obligation; provided the Company shall not be obligated to incur a cost for such
bond in excess of $25,000 annually. Executive may assign his right to Severance.
(c) In the event Severance is payable hereunder, the Employment Period
shall be deemed to include the time with respect to which Severance is paid for
purposes of Section 6 hereof (i.e., if Executive is paid 150% of his Base Salary
as Severance, the Employment Period will be deemed to have been extended for 18
months).
7.2 Termination With Cause. The Company shall have the option to
terminate the Employment Period for good cause ("Cause"), which shall consist
only of the following: (a) acts of misconduct materially injurious to the
Company, which acts occur or are first discovered after the date hereof; or (b)
the willful and continued failure by the Executive substantially to perform his
duties with the Company (other than any such failure resulting from incapacity
due to mental or physical illness) after a demand in writing for substantial
performance is delivered by the Board of Directors, which demand specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed his duties, and affords Executive a reasonable
opportunity to cure, and such failure results in demonstrably material injury to
the Company. Cause shall not, however, exist as the result of any act or
omission believed in good faith to have been in or not opposed to the interests
of the Company. The Executive shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board of Directors, at a meeting of the Board of
Directors called and held for the purpose (after not less than 30 days' written
notice to the Executive and an opportunity for him, together with his counsel,
to be heard before the Board of Directors, such notice of meeting to indicate
the specific termination provision of this Agreement relied upon and to specify
in reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated), finding that in the good faith
opinion of the Board of Directors the Executive
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was guilty of conduct set forth above in clauses (a) or (b) of the first
sentence of this paragraph and specifying the particulars thereof in detail.
7.3 Surrender of Properties. Upon termination of Executive's employment
with the Company, regardless of the cause therefor, Executive shall promptly
surrender to the Company all property provided him by the Company for use in
relation to his employment, and, in addition, Executive shall surrender to the
Company any and all sales materials, lists of clients and prospective clients,
price lists, files, records, or other materials and information of or pertaining
to the Company or its clients or prospective clients or the products, business,
and operations of the Company.
7.4 Survival of Covenants. The covenants of Executive set forth in
Section 6 of this Agreement shall survive the termination of the Employment
Period or termination of this Agreement, regardless of the cause therefor.
8. Indemnification. The Company shall indemnify and hold harmless the
Executive to the fullest extent permitted by the Code of Regulations of the
Company with respect to any claim asserted by any third party arising from or
relating to any action or inaction of Executive while serving the Company. In
addition, without conceding the enforceability of any such obligation, upon the
occurrence of a Major Transaction the Company will use its best efforts to cause
Stonehenge Opportunity Fund, LLP to release Executive from any obligation under
that certain Unconditional Guaranty of Payment and Performance dated April 9,
2002.
9. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns. The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all its assets to expressly
assume and agree to perform this agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place.
10. General Provisions.
10.1 Notice. Any notice required or permitted hereunder shall be made
in writing (a) either by actual delivery of the notice into the hands of the
party thereunder entitled, or (b) by the mailing of the notice in the United
States mail, certified or registered mail, return receipt requested, all postage
prepaid and addressed to the party to whom the notice is to be given at the
party's respective address set forth below, or such other address as the parties
may from time to time designate by written notice as herein provided.
As addressed to the Company: TEAM America, Inc.
000 X. Xxxxxx Xxxxxx Xx.
Xxxxxxxxxxx, Xxxx 00000
Attention: S. Cash Xxxxxxxxx
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As addressed to Executive: S. Cash Xxxxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxx Xxxxxx, XX 00000
The notice shall be deemed to be received in case (a) on the date of its actual
receipt by the party entitled thereto and in case (b) on the date of its
mailing.
10.2 Amendment and Waiver. No amendment or modification of this
Agreement shall be valid or binding upon the Company unless made in writing and
signed by an officer of the Company duly authorized by the Board of Directors or
upon Executive unless made in writing and signed by him. The waiver by the
Company of the breach of any provision of this Agreement by Executive shall not
operate or be construed as a waiver of any subsequent breach by him.
10.3 Governing Law. The validity and effect of this Agreement and the
rights and obligations of the parties hereto shall be construed and determined
in accordance with the laws of the State of Ohio.
10.4 Entire Agreement. This Agreement contains all of the terms agreed
upon by the parties with respect to the subject matter hereof and supersedes all
prior agreements, arrangements and communications between the parties dealing
with such subject matter, whether oral or written.
10.5 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the transferees, successors and assigns of the Company,
including any company or corporation with which the Company may merge or
consolidate.
10.6 Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved exclusively by arbitration in
Franklin County, Ohio under the auspices and in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The Company shall pay all
expenses arising from or relating to the arbitration proceeding.
10.7 Costs of Enforcement. In the event of any suit or proceeding
seeking to enforce the terms, covenants, or conditions of this Agreement, the
prevailing party shall, in addition to all other remedies and relief that may be
available under this Agreement or applicable law, recover his or its reasonable
attorneys' fees and costs as shall be determined and awarded by the court or
arbitrator.
10.8 Headings. Numbers and titles to paragraphs hereof are for
information purposes only and, where inconsistent with the text, are to be
disregarded.
10.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together, shall be and constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date and year first written above.
TEAM AMERICA, INC.
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By: Xxx Xxxxxxxx
Title: President
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S. Cash Xxxxxxxxx
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